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02 Apr 2005, 23:27
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
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A United States manufacturer of farm equipment reported a 1988 third-quarter net income of $32 million, compared with $25.5 million in the third quarter of 1987. This increase was realized despite a drop in United States retail sales of farm equipment toward the end of the third quarter of 1988 as a result of a drought.
Which of the following, if true, would contribute most to an explanation of the increase in the manufacturer’s net income?
(A) During the third quarter of 1988, the manufacturer announced that it would add irrigation systems to its line of products.
(B) In the third quarter of 1988, the manufacturer paid no wages during a six-week strike, but stocks on hand were adequate to supply dealers.
(C) Sales in the United States of farm equipment made and sold by foreign companies were higher in the third quarter of 1988 than in any previous quarter.
(D) Official dealers of the manufacturer had low supplies of farm equipment during the third quarter of 1988.
(E) Eligible United States farmers benefited from a federal drought-relief fund late in the third quarter of 1988.
Please justify your answer.
Which of the following, if true, would contribute most to an explanation of the increase in the manufacturer’s net income?
(A) During the third quarter of 1988, the manufacturer announced that it would add irrigation systems to its line of products.
(B) In the third quarter of 1988, the manufacturer paid no wages during a six-week strike, but stocks on hand were adequate to supply dealers.
(C) Sales in the United States of farm equipment made and sold by foreign companies were higher in the third quarter of 1988 than in any previous quarter.
(D) Official dealers of the manufacturer had low supplies of farm equipment during the third quarter of 1988.
(E) Eligible United States farmers benefited from a federal drought-relief fund late in the third quarter of 1988.
Please justify your answer.
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02 Apr 2005, 23:45
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B should be it (net income = total revenue - total costs, as total revenue could have been the same, but the total costs were considerable reduced, the net income should have increased)
03 Apr 2005, 02:33
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It seems more likely to be E than B. I would be really interested in knowing the OA and the source of such question.
