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# A private bus company gained greater profits and provided

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Intern
Joined: 02 Jan 2009
Posts: 15
A private bus company gained greater profits and provided [#permalink]

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06 Feb 2009, 00:58
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A private bus company gained greater profits and provided bus service to the area at lower fares by running buses more frequently and stimulating greater ridership. Hoping to continue these financial trends, the company plans to replace all older buses with new, larger buses, including some double-decker buses.

The plan of the bus company as described above assumes all of the following EXCEPT
(A) the demand for bus service in the company’s area of service will increase in the future
(B) increased efficiency and revenues will compensate for any new expenses the company incurs
(C) the new buses will be sufficiently reliable to ensure the company a net financial gain once they are in place
(D) driving the new buses will be no more difficult than driving the buses they are to replace
(E) the larger, double-decker buses will not face obstacles such as height and weight restrictions in the bus company’s area of service

Most of the times i do not get these assumption questions correct. Can someone please explain how to answer/approach these questions?
Director
Joined: 23 May 2008
Posts: 762

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06 Feb 2009, 01:52
janet1511 wrote:
A private bus company gained greater profits and provided bus service to the area at lower fares by running buses more frequently and stimulating greater ridership. Hoping to continue these financial trends, the company plans to replace all older buses with new, larger buses, including some double-decker buses.

The plan of the bus company as described above assumes all of the following EXCEPT
(A) the demand for bus service in the company’s area of service will increase in the future
(B) increased efficiency and revenues will compensate for any new expenses the company incurs
(C) the new buses will be sufficiently reliable to ensure the company a net financial gain once they are in place
(D) driving the new buses will be no more difficult than driving the buses they are to replace
(E) the larger, double-decker buses will not face obstacles such as height and weight restrictions in the bus company’s area of service

Most of the times i do not get these assumption questions correct. Can someone please explain how to answer/approach these questions?

i would go with A

they are replacing old buses with new buses, the net amount of buses should be the same, they are not expecting an increase in demand
Senior Manager
Joined: 23 May 2008
Posts: 395

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06 Feb 2009, 02:14
OA D
VP
Joined: 18 May 2008
Posts: 1207

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06 Feb 2009, 04:37
It should be D.Driving the new buses is not an ssumptions in profit making.
@gurpreet, do u know the official ans(OA) or this is ur answer?
janet1511 wrote:
A private bus company gained greater profits and provided bus service to the area at lower fares by running buses more frequently and stimulating greater ridership. Hoping to continue these financial trends, the company plans to replace all older buses with new, larger buses, including some double-decker buses.

The plan of the bus company as described above assumes all of the following EXCEPT
(A) the demand for bus service in the company’s area of service will increase in the future
(B) increased efficiency and revenues will compensate for any new expenses the company incurs
(C) the new buses will be sufficiently reliable to ensure the company a net financial gain once they are in place
(D) driving the new buses will be no more difficult than driving the buses they are to replace
(E) the larger, double-decker buses will not face obstacles such as height and weight restrictions in the bus company’s area of service

Most of the times i do not get these assumption questions correct. Can someone please explain how to answer/approach these questions?
Director
Joined: 25 Oct 2006
Posts: 610

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06 Feb 2009, 04:42
1
KUDOS
Find out all the valid assumptions first. Obviously you will get four sure assumptions and the rest will be your answer.
see here,
Premise: bus with low fare can make high profit while the frequency is high.
Conclusion: So proposed to buy new big coaches to increase the revenue.

Now few factors should agree also such as passengers are increasing, excess spending will be compensated, sure gain etc. However, drivers' notions have never been concerned so far. So D is not the assumption.
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Senior Manager
Joined: 23 May 2008
Posts: 395

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06 Feb 2009, 04:49
ritula wrote:
It should be D.Driving the new buses is not an ssumptions in profit making.
@gurpreet, do u know the official ans(OA) or this is ur answer?
janet1511 wrote:
A private bus company gained greater profits and provided bus service to the area at lower fares by running buses more frequently and stimulating greater ridership. Hoping to continue these financial trends, the company plans to replace all older buses with new, larger buses, including some double-decker buses.

The plan of the bus company as described above assumes all of the following EXCEPT
(A) the demand for bus service in the company’s area of service will increase in the future
(B) increased efficiency and revenues will compensate for any new expenses the company incurs
(C) the new buses will be sufficiently reliable to ensure the company a net financial gain once they are in place
(D) driving the new buses will be no more difficult than driving the buses they are to replace
(E) the larger, double-decker buses will not face obstacles such as height and weight restrictions in the bus company’s area of service

Most of the times i do not get these assumption questions correct. Can someone please explain how to answer/approach these questions?

VP
Joined: 05 Jul 2008
Posts: 1378

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06 Feb 2009, 09:36
I got D as well. Difficult does not mean impossible. they will still drive. It will not have an impact on the financial gains.

all other assumptions will have financial impacts and hence are needed.
Director
Joined: 01 Aug 2008
Posts: 698

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06 Feb 2009, 09:42
D.
Director
Joined: 23 May 2008
Posts: 762

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06 Feb 2009, 10:43
icandy wrote:
I got D as well. Difficult does not mean impossible. they will still drive. It will not have an impact on the financial gains.

all other assumptions will have financial impacts and hence are needed.

This was my initiial thought and I came up with D at first, but if the buses are more difficult to operate the company can not run them as "frequently" and can not continue this "financial trend".

I still think its A, but wont be surprised if its D
VP
Joined: 05 Jul 2008
Posts: 1378

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06 Feb 2009, 12:12
bigtreezl wrote:
icandy wrote:
I got D as well. Difficult does not mean impossible. they will still drive. It will not have an impact on the financial gains.

all other assumptions will have financial impacts and hence are needed.

This was my initiial thought and I came up with D at first, but if the buses are more difficult to operate the company can not run them as "frequently" and can not continue this "financial trend".

I still think its A, but wont be surprised if its D

I disagree. Just negate A and see what will happen to the financial trends they expect to continue. If he demand does not increase, where will the company recoup the money they invested on new buses. They not only have to recoup the money invested but have to make profits. For that demand has to increase and not just stay the same

I was not a fan of D either because difficult does not mean impossible but at the same time can very well cause long rides causing to fewere frequency on certain routes/degraded service and finally loss in passengers/money.

Felt that D was the lesser of the evil as it needs a bigger assumption/connection to get to the conclusion. A is directly connected.
Intern
Joined: 02 Jan 2009
Posts: 15

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06 Feb 2009, 12:36
Thanks guys. OA is D.
I am not very convinced though. A, B, and C are directly related to financial gains, hence out
was confused between D and E.
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Joined: 21 Apr 2008
Posts: 479
Schools: Kellogg, MIT, Michigan, Berkeley, Marshall, Mellon

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06 Feb 2009, 14:23
priyankur_saha@ml.com wrote:
Find out all the valid assumptions first. Obviously you will get four sure assumptions and the rest will be your answer.
see here,
Premise: bus with low fare can make high profit while the frequency is high.
Conclusion: So proposed to buy new big coaches to increase the revenue.

Now few factors should agree also such as passengers are increasing, excess spending will be compensated, sure gain etc. However, drivers' notions have never been concerned so far. So D is not the assumption.

+1!!

Cheers
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Director
Joined: 23 May 2008
Posts: 762

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06 Feb 2009, 15:11
icandy wrote:
bigtreezl wrote:
icandy wrote:
I got D as well. Difficult does not mean impossible. they will still drive. It will not have an impact on the financial gains.

all other assumptions will have financial impacts and hence are needed.

This was my initiial thought and I came up with D at first, but if the buses are more difficult to operate the company can not run them as "frequently" and can not continue this "financial trend".

I still think its A, but wont be surprised if its D

I disagree. Just negate A and see what will happen to the financial trends they expect to continue. If he demand does not increase, where will the company recoup the money they invested on new buses. They not only have to recoup the money invested but have to make profits. For that demand has to increase and not just stay the same

I was not a fan of D either because difficult does not mean impossible but at the same time can very well cause long rides causing to fewere frequency on certain routes/degraded service and finally loss in passengers/money.

Felt that D was the lesser of the evil as it needs a bigger assumption/connection to get to the conclusion. A is directly connected.

what you said makes alot of sense. I guess I talked myself out of D by over thinking the question
Senior Manager
Joined: 02 Nov 2008
Posts: 255

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06 Feb 2009, 17:21
A, B, C, & E must be assumed or the argument falls apart. Only D is irrelevant and thus the correct answer.
VP
Joined: 18 May 2008
Posts: 1207

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06 Feb 2009, 23:23
Gurpreet, pls dnt mention any answer as OA unless u r sure it is. Sometimes, it may lead others to believe a wrong asnwer as the official answer.
gurpreet07 wrote:
ritula wrote:
It should be D.Driving the new buses is not an ssumptions in profit making.
@gurpreet, do u know the official ans(OA) or this is ur answer?
janet1511 wrote:
A private bus company gained greater profits and provided bus service to the area at lower fares by running buses more frequently and stimulating greater ridership. Hoping to continue these financial trends, the company plans to replace all older buses with new, larger buses, including some double-decker buses.

The plan of the bus company as described above assumes all of the following EXCEPT
(A) the demand for bus service in the company’s area of service will increase in the future
(B) increased efficiency and revenues will compensate for any new expenses the company incurs
(C) the new buses will be sufficiently reliable to ensure the company a net financial gain once they are in place
(D) driving the new buses will be no more difficult than driving the buses they are to replace
(E) the larger, double-decker buses will not face obstacles such as height and weight restrictions in the bus company’s area of service

Most of the times i do not get these assumption questions correct. Can someone please explain how to answer/approach these questions?

Senior Manager
Joined: 23 May 2008
Posts: 395

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08 Feb 2009, 21:02
ok i am sorry......in future i'll keep this in mind.

Thanks
Re: CR-HELP   [#permalink] 08 Feb 2009, 21:02
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# A private bus company gained greater profits and provided

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