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A multinational electricity conglomerate, in its 2004 annual

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A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post Updated on: 13 Aug 2012, 05:02
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A multinational electricity conglomerate, in its 2004 annual report, disclosed that four of its five divisions made a profit, an improvement over last year when only the European division had positive net income. The Chief Executive Officer claimed his new strategy, which involved exploiting previously untapped rural markets, is completely responsible for the improved financial performance.

Which of the following, if true, would most seriously weaken the CEO's explanation of the conglomerate's improved financial performance?

A.The electricity conglomerate opened over thirty-three new profitable offices in rural markets last year.
B.The company's urban markets did not experience substantial changes in terms of either revenues or costs.
C.The accounting department applied a new accounting regulation that includes as revenue transactions that previously would have not have been recorded until the following year.
D.There will be fewer layoffs at the unprofitable divisions because a new union contract allows the company to reduce wages by ten percent to alleviate financial constraints.
E.Five years ago, the company's five divisions all met or exceeded the average net income of the one hundred largest electricity companies.

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Originally posted by thevenus on 08 Aug 2012, 05:37.
Last edited by thevenus on 13 Aug 2012, 05:02, edited 1 time in total.
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Re: A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post 08 Aug 2012, 06:24
IMO C.
B: strengthens the argument
And all other seems Out of scope
Wait for OA!!!
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Re: A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post 10 Aug 2012, 06:46
i also go with C

Officer claimed his new strategy, which involved exploiting previously untapped rural markets, is completely responsible for the improved financial performance.

C provides alternate explanation so weakens his claim
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Re: A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post 10 Aug 2012, 08:30
The answer is C .It gives an alternate explanation for the increase in revenue and hence weakens the argument .
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Re: A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post 13 Aug 2012, 04:53
Premise: this year has 4 profit divisions over 1 last year.
Conclusion: New strategy accounts for that
Weaken: Seek for addition premise that accounts for the profit and withdraw the claim made by CEO

A.The electricity conglomerate opened over thirty-three new profitable offices in rural markets last year -> Strengthen the CEO's claim
B.The company's urban markets did not experience substantial changes in terms of either revenues or costs -> No change in profit ? Irrelavant to the question sterm discussed here
C.The accounting department applied a new accounting regulation that includes as revenue transactions that previously would have not have been recorded until the following year. -> This year has addition revenue from last year. This additional premise tells that CEO's claim is not relevant to this year profit. This's the correct answer
D.There will be fewer layoffs at the unprofitable divisions because a new union contract allows the company to reduce wages by ten percent to alleviate financial constraints. -> Another strategy from CEO ? Not mention in passage and can't help determine the CEO's claim validation
E.Five years ago, the company's five divisions all met or exceeded the average net income of the one hundred largest electricity companies. -> This is an event in the past and doesn't help to validate the CEO's claim
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Re: A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post 13 Aug 2012, 05:03
Thank you all for the response.Undoubtedly, the winner is (C).
Cheers !!!
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Re: A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post 14 Aug 2012, 04:05
The answer is C.

C gives us an alternate explanation why the company has posted improved financial performance.
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Re: A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post 14 Aug 2012, 07:12
A multinational electricity conglomerate, in its 2004 annual report, disclosed that four of its five divisions made a profit, an improvement over last year when only the European division had positive net income. The Chief Executive Officer claimed his new strategy, which involved exploiting previously untapped rural markets, is completely responsible for the improved financial performance.

Which of the following, if true, would most seriously weaken the CEO's explanation of the conglomerate's improved financial performance?

A.The electricity conglomerate opened over thirty-three new profitable offices in rural markets last year.
=> This choice does not affect anything to the conclusion of the argument
B.The company's urban markets did not experience substantial changes in terms of either revenues or costs.
=> The conclusion of the argument is about the rural market, not about urban market. So, this choice is irrelevant to the conclusion of the argument
C.The accounting department applied a new accounting regulation that includes as revenue transactions that previously would have not have been recorded until the following year.
=> This is great other explanation for the conclusion of the argument, alternating the rural market's responsibilities to the improved financial performance. By the way, because of the new system of accounting, revenue transactions would have not been recorded until the following year.
D.There will be fewer layoffs at the unprofitable divisions because a new union contract allows the company to reduce wages by ten percent to alleviate financial constraints.
=> Irrelevant to the conclusion
E.Five years ago, the company's five divisions all met or exceeded the average net income of the one hundred largest electricity companies.
=> Out of scope
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Re: A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post 26 Jun 2013, 09:35
Guys, I agree, with C, but isn't the sentence grammatically incorrect?

The accounting department applied a new accounting regulation that includes as revenue transactions that previously would have not have been recorded until the following year.

I believe it should be:

The accounting department applied a new accounting regulation that includes as revenue transactions that which previously would have not have been recorded until the following year.

OR

The accounting department applied a new accounting regulation that includes as revenue transactions that previously would have not have been recorded until the following year.


Kaplan: PLEASE please work harder to ensure that your sentences are grammatically correct. It's really difficult to try to learn from questions when you can't be sure of their legitimacy.
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Re: A multinational electricity conglomerate, in its 2004 annual  [#permalink]

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New post 10 Sep 2018, 07:30
The words "would most seriously weaken" identify this as a Weaken question. The correct answer will make the CEO's explanation less likely to be true.

The CEO claimed that the new rural-market strategy is "completely responsible" for the conglomerate's improved performance. His evidence for this causal claim is simply that more divisions made a profit this year than last.

The CEO is assuming there is no other explanation for the improved performance. A weakener will attack the connection between the CEO's evidence and his conclusion. It will suggest some other explanation for the fact that more of the conglomerate's divisions made a profit this year. It's hard to know exactly what the GMAT will come up with, but having the general prediction in mind will make it much easier to eliminate wrong choices.

(C) suggests another explanation for the higher income and is therefore correct. It's not that the rural-market strategy caused improved performance, but simply that changes in accounting procedures resulted in more things being included as revenue than before.

(A) is a 180. By explaining that exploiting rural markets is having a significant positive impact on the company's operations, this strengthens, rather than weakens, the CEO's explanation.

(B) is also a 180. By establishing that urban markets did not account for the profit increase, this choice makes it more likely that rural markets did. While this doesn't prove the CEO's explanation, it does make it a little more likely to be correct.

(D) deals with consequences of having an unprofitable division, which are completely unrelated to the causes of the company's improved financial performance. This is thus irrelevant to the argument.

(E) is irrelevant to the argument, which is about the improvement between 2003 and 2004. Events that took place in 1999 have no bearing on whether the company's improved financial performance in the year in question were due to the CEO's strategy.
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Re: A multinational electricity conglomerate, in its 2004 annual &nbs [#permalink] 10 Sep 2018, 07:30
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