GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 16 Aug 2018, 20:43

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

A company that invests the necessary infrastructure in a large

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Retired Moderator
User avatar
Joined: 06 Jul 2014
Posts: 1248
Location: Ukraine
Concentration: Entrepreneurship, Technology
GMAT 1: 660 Q48 V33
GMAT 2: 740 Q50 V40
GMAT ToolKit User Premium Member
A company that invests the necessary infrastructure in a large  [#permalink]

Show Tags

New post 08 Aug 2015, 02:52
2
00:00
A
B
C
D
E

Difficulty:

  65% (hard)

Question Stats:

59% (01:34) correct 41% (01:36) wrong based on 359 sessions

HideShow timer Statistics

A company that invests the necessary infrastructure in a large untapped diamond mine can reap as much as 700% profit in the first year. Some of the largest untapped diamond mines in the world are in the nation of Shagoca. Therefore, the American company that brokers a deal in the capital Conkin that allows it to put the necessary infrastructure in place at those mines stands to reap tremendous profits.

Which of the following, if true, most helps to explain why American companies are not eager to invest in infrastructure necessarily for diamond mining in Shagoca?

A) The diamond mines in Shagoca are located close to population centers, which would allow for easy transport
B) Diamond mining in climates closer to the equator, such as that in Shagoca, is much easier than diamond mining in regions where the soil is frozen most of the year
C) In certain states in Shagoca, profit from diamond mining is as heavily taxed as it is in the United States
D) A minority of the traders buying the diamonds will be citizens of Shagoca.
E) The fifteen-year-old civil war in Shagoca has caused significant setbacks for many foreign investments.

_________________

Simple way to always control time during the quant part.
How to solve main idea questions without full understanding of RC.
660 (Q48, V33) - unpleasant surprise
740 (Q50, V40, IR3) - anti-debrief ;)

Current Student
User avatar
B
Joined: 05 Apr 2015
Posts: 416
Reviews Badge
Re: A company that invests the necessary infrastructure in a large  [#permalink]

Show Tags

New post 11 Aug 2015, 02:15
E makes complete sense.

The other option C talks only about "certain states". It means in other states of Shagoca the argument wont hold any grounds...

As per E the investment environment is bad.

Regards,
Dom.
Board of Directors
User avatar
P
Joined: 17 Jul 2014
Posts: 2717
Location: United States (IL)
Concentration: Finance, Economics
GMAT 1: 650 Q49 V30
GPA: 3.92
WE: General Management (Transportation)
GMAT ToolKit User Premium Member Reviews Badge
Re: A company that invests the necessary infrastructure in a large  [#permalink]

Show Tags

New post 06 Apr 2016, 18:59
Harley1980 wrote:
A company that invests the necessary infrastructure in a large untapped diamond mine can reap as much as 700% profit in the first year. Some of the largest untapped diamond mines in the world are in the nation of Shagoca. Therefore, the American company that brokers a deal in the capital Conkin that allows it to put the necessary infrastructure in place at those mines stands to reap tremendous profits.

Which of the following, if true, most helps to explain why American companies are not eager to invest in infrastructure necessarily for diamond mining in Shagoca?

A) The diamond mines in Shagoca are located close to population centers, which would allow for easy transport
B) Diamond mining in climates closer to the equator, such as that in Shagoca, is much easier than diamond mining in regions where the soil is frozen most of the year
C) In certain states in Shagoca, profit from diamond mining is as heavily taxed as it is in the United States
D) A minority of the traders buying the diamonds will be citizens of Shagoca.
E) The fifteen-year-old civil war in Shagoca has caused significant setbacks for many foreign investments.


A - strengthener
B - strengthener
C - neutral..even in US companies can make 700% profit in first year..so doubtful one..close but not.
D - irrelevant
E - looks good.

E for me.
Director
Director
User avatar
D
Joined: 23 Sep 2015
Posts: 803
GMAT ToolKit User Reviews Badge
A company that invests the necessary infrastructure in a large  [#permalink]

Show Tags

New post 24 May 2018, 19:07

MAGOOSH OFFICIAL EXPLANATION:



This sounds like situation with a possibility of huge profits. There must be something we are missing to explain why American companies are not eager to invest here.

(E) is the credited answer. If there's been a civil war for 15 years, this sounds like it's not going to resolve any time soon. War = potential destruction of infrastructure as well as loss of life. Any company going into build a diamond mine could lose the sum total of their initial outlay in one well-placed bomb, losing several employees in the process! That certainly sounds like something that would make a company reluctant to invest in Shagoca.

(A) & (B) do the opposite of what we want: they both provide explanations of why the situation would be more profitable, which does not explain why companies would not want to invest there.

(C) is weak: true, no one likes paying taxes, but if you can make 700% profits on your initial investment, then taxes are not a huge concern. This, in and of itself, would not explain the reluctance of companies.

(D) is strangely irrelevant: diamonds always have buyers worldwide, and transport costs for diamonds are not significant. If some of the buyers are actually citizens of Shagoca, this makes no difference at all in how profitable these investments would be.
_________________

Thanks!
Do give some kudos.

Simple strategy:
“Once you’ve eliminated the impossible, whatever remains, however improbable, must be the truth.”

Best Gmat Resource:
GmatPrep CR|GmatPrep SC|GmatPrep RC

Want to improve your Score:
GMAT Ninja YouTube! Series 1| GMAT Ninja YouTube! Series 2

Intern
Intern
avatar
B
Joined: 24 Jan 2015
Posts: 43
Location: India
CAT Tests
Re: A company that invests the necessary infrastructure in a large  [#permalink]

Show Tags

New post 09 Jun 2018, 05:59
Hi All,

I picked B for this question as the question asks what would most explain why American companies are not keen on "investing in infrastructure". My reasoning for picking B is that if the climate permits that the mining can be done easily without the necessary infrastructure then why would the companies be keen on investing money for the necessary infrastructure.

Is there something missing in my reasoning.

Would appreciate any help on this.

Thanks
Manager
Manager
User avatar
B
Joined: 17 Jan 2017
Posts: 137
Location: India
GPA: 4
WE: Information Technology (Computer Software)
CAT Tests
Re: A company that invests the necessary infrastructure in a large  [#permalink]

Show Tags

New post 09 Jun 2018, 08:37
Amirfunc wrote:
Hi All,

I picked B for this question as the question asks what would most explain why American companies are not keen on "investing in infrastructure". My reasoning for picking B is that if the climate permits that the mining can be done easily without the necessary infrastructure then why would the companies be keen on investing money for the necessary infrastructure.

Is there something missing in my reasoning.

Would appreciate any help on this.

Thanks

Option B is a strengthener. The question stem asks a reason for which the American companies are hesitating to invest but option B gives a reason why they shouldn't hesitate.

Option E clearly gives a strong reason why a company wouldn't invest in shicagoa that is because of the civil war there which could result in huge losses if they invest.
_________________

Correct me If I'm wrong !! looking for valuable inputs

KUDOS please, if you like the post or if it helps !!

Intern
Intern
avatar
B
Joined: 27 Apr 2015
Posts: 4
Location: Singapore
Concentration: General Management, Strategy
GMAT 1: 620 Q47 V28
GPA: 3.32
Re: A company that invests the necessary infrastructure in a large  [#permalink]

Show Tags

New post 09 Jun 2018, 08:44
Amirfunc wrote:
Hi All,

I picked B for this question as the question asks what would most explain why American companies are not keen on "investing in infrastructure". My reasoning for picking B is that if the climate permits that the mining can be done easily without the necessary infrastructure then why would the companies be keen on investing money for the necessary infrastructure.

Is there something missing in my reasoning.

Would appreciate any help on this.

Thanks


Hi Amirfunc,

Option B does not specify "without the necessary infrastructure". It says the mining will be easier.
The Infrastructure is "necessary" --> no infrastructure = no mining possible (irrespective of the climate)
Intern
Intern
avatar
B
Joined: 24 Jan 2015
Posts: 43
Location: India
CAT Tests
A company that invests the necessary infrastructure in a large  [#permalink]

Show Tags

New post 10 Jun 2018, 04:19
Akash720 and navaneethmmb

Thank you for your inputs, seems clear to me now.

Appreciate it.
A company that invests the necessary infrastructure in a large &nbs [#permalink] 10 Jun 2018, 04:19
Display posts from previous: Sort by

A company that invests the necessary infrastructure in a large

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  

Events & Promotions

PREV
NEXT


GMAT Club MBA Forum Home| About| Terms and Conditions and Privacy Policy| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.