A multinational electricity conglomerate, in its 2004 annual report, d

Official Explanation

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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