A county airport, designed to serve the needs of private aircraft owne

Question

A county airport, designed to serve the needs of private aircraft owners, planned to cover its operating expenses in part by charging user fees to private aircraft using the airport. The airport was unable to pay its operating expenses because the revenue from user fees was lower that expected.

If the statements above are true, which one of the following must also be true?

(A) Most of the country's citizens live a convenient distance from one or another airport now offering commercial airline services.

(B) Private aircraft owners were unwilling to pay the user fees charged at the airport.

(C) The airport's construction was financed exclusively by private funds.

(D) The airport's operating expenses were greater than the revenues raised from sources other than the airport user fees for private planes.

(E) The number of owners of private aircraft who use the county's airport facilities will not change appreciably in the future.

WillEconomistGMAT · Answer

Hint: focus on the phrase "unable to pay its operating expenses"

vivmechster · Answer

I have a doubt on option (D)

Truth 1: The airport was unable to pay its operating expenses
Truth 2: the revenue from user fees was lower that expected. 
Let's Say Operating expense = 100
expected Revenue from user fees = 60
actual revenue from user fees = 30

(D) The airport's operating expenses were greater than the revenues raised from sources other than the airport user fees for private planes.
if revenue raised from other source = 10 (100>10)
Total Revenue = 30+10 = 40 -------------Airport cannot pay operating cost, conclusion holds true.

if revenue raised from other source = 90 (100>90)
Total revenue = 30+90 =120 -----------------Airport can pay operating cost, conclusion does does not hold true.

So, choice D is not always true.

Correct me if I am wrong.

darkhorse19 · Answer

According to my analysis, the key lies in the following part of the argument

".. planned to cover its operating expenses  in part 
by charging user fees to private aircraft using the airport..."

This indicates that only a part of the operational expenses were to be covered with the user fees whereas the remaining part should come from other sources.

Also it is mentioned that airport was unable to pay the expenses due to lower user fees than expected implying that the expected amount of user fees could cover the expenses, which also means that the remaining amount from other sources was not expected to be sufficient or any higher.

Hence option D should be correct.

akashb106 · Answer

(A) Most of the country's citizens live a convenient distance from one or another airport now offering commercial airline services. ----  Out of Scope. Where the citizens live is none of our business. Even though commercial airline services run from the airports but the question stem does not provide any info about the impact of commercial airlines on the revenue.
 
(B) Private aircraft owners were unwilling to pay the user fees charged at the airport.----  Okay, The revenue from user fees was lower than expected. If the PA owners were unwilling to pay the user fees then the authorities would have taken that into account before estimating the expected revenue.  No information to support this answer from the question stem.

(C) The airport's construction was financed exclusively by private funds.----  Out of scope. Cannot infer this at all from the question stem.

(D) The airport's operating expenses were greater than the revenues raised from sources other than the airport user fees for private planes.----  CORRECT because the question stem uses statements such as  cover its operating expenses in part  and  user fees was lower that expected. . Now this answer tells us that there are other income that cover the operating expenses. So if operating revenues could not be covered, then the revenue from other sources is probably less than the expenses that need to be covered after the revenue from user fees. 
 
(E) The number of owners of private aircraft who use the county's airport facilities will not change appreciably in the future.----  We cannot infer this. It may or may not change appreciably in the future. Just because the revenue was not up to the mark now, does not mean it will stay like this forever.

KrishnakumarKA1 · Answer

(A) Most of the country's citizens live a convenient distance from one or another airport now offering commercial airline services. (Wrong Answer : This is not necessary for the argument to be true.)

(B) Private aircraft owners were unwilling to pay the user fees charged at the airport.( Wrong Answer :This is not something that can be derived from the argument.)

(C) The airport's construction was financed exclusively by private funds. ( Wrong Answer : This is totally out of the scope of the argument.)

(D) The airport's operating expenses were greater than the revenues raised from sources other than the airport user fees for private planes. ( Right Answer : It is clear from the argument that the airport has planned to utilize funds from two different sources of income to pay for the operating expenses. If the the airport is not able to pay for its operating expenses means the income earned from sources other than user fees is individually not sufficient to cover for the operating expenses of the airport.)

(E) The number of owners of private aircraft who use the county's airport facilities will not change appreciably in the future.( wrong answer : The discussion in the argument is not about a future scenario.)

JS1290 · Answer

I have a confusion with option B. Could anyone please explain to me why option B is incorrect?

abhimahna · Answer

Hi  csaluja  ,

Here I go:

The argument is saying airport planned to charge extra fees but still it was unable to cover expenses.

We need to infer something out of this.

(B) Private aircraft owners were unwilling to pay the user fees charged at the airport.

How do you know they were unwilling? May be they were making the payment but still expenses were not covered. We are also told that they are already paying something but it is still less. Hence, telling that they were unwilling is wrong. This is blaming them for not paying when they actually are paying something. Hence, incorrect.

(D) The airport's operating expenses were greater than the revenues raised from sources other than the airport user fees for private planes.

This adds a possibility that even if they were getting money from some outside sources, the expense was more enough that they were forced to charge extra fees now.

JS1290 · Answer

Understood completely, thank you so much! Kudos given!

ravigupta2912 · Answer

Key here is lack of ability to pay operating expenses.

B gives 1 reason for lower than expected revenues from user fee but there could be multiple other reasons (payment gateway not working, etc etc). We cannot say for sure that "unwillingness" was the only reason. At least it is not borne out directly from the passage.

Now, since the operating expenses were not covered, this means that whatever other revenue the airport had, was also not enough or in other words operating expenses were higher than such alternate sources of revenue (even if they existed).

So D is the winner.

unraveled · Answer

A county airport, designed to serve the needs of private aircraft owners, planned to cover its operating expenses in part by charging user fees to private aircraft using the airport. The airport was unable to pay its operating expenses because the revenue from user fees was lower that expected.

If the statements above are true, which one of the following must also be true?

(A)  Most of the country's citizens live a convenient distance  from one or another airport now offering commercial airline services. - WRONG. Nothing related to revenue or expenses.

(B) Private aircraft owners were  unwilling to pay  the user fees charged at the airport. - WRONG. Willingness is irrelevant as it is about whatever revenue it generated could not cover the expenses.

(C) The airport's  construction was financed exclusively  by private funds. - WRONG. Irrelevant.

(D) The airport's operating  expenses were greater than the revenues raised from sources other than the airport user fees  for private planes. - CORRECT. Straight to the point.

(E) The  number of owners of private aircraft  who use the county's airport facilities  will not change  appreciably in the future. - WRONG. Number does not impact the revenue or expense aspect.

Answer D.

vikasshetty · Answer

Operating expenses were initially covered by other sources. To fill the gap, owners were about to charge user fees. But revenue from users was less than expected which means some owners did not pay up.

How is option D correct in that case.

KarishmaB please explain if possible.

How is option D correct in that case.

KarishmaB  please explain if possible.

KarishmaB · Answer

Operating expense was to be covered in two ways - user fees + other revenues
User fees was supposed to cover the expense partly.

Revenue from user fees was lower than expected (so they expected to get say $1 million in user fees over the year but they got only $500k).

So the airport was unable to pay its operating expense.

What does this mean? It means that the 'other revenue' was less than (operating expense - 500k). It couldn't make up the difference.
This means that certainly other revenue was lower than the operating expense.

Hence option (D) is certainly true.

(B) Private aircraft owners were unwilling to pay the user fees charged at the airport.

Option (B) may not be true. Private aircraft owners may be willing to pay the user fees but they may not have used the airport enough to generate that quantum of fees. We don't know how private aircraft owners feel about the user fees.

Answer (D)

A county airport, designed to serve the needs of private aircraft owne

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A county airport, designed to serve the needs of private aircraft owne

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