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# Accountant: This company simply cannot afford to hire a new salesperso

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Math Expert
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Accountant: This company simply cannot afford to hire a new salesperso  [#permalink]

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Updated on: 23 Jul 2018, 23:11
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5% (low)

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90% (01:00) correct 10% (00:58) wrong based on 97 sessions

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Accountant: This company simply cannot afford to hire a new salesperson.With salespeople we not only incur the salary and healthcare costs, but also the costs of a new computer, a business cell phone plan, and mileage reimbursement for driving to sales appointments. This new salesperson could raise our monthly expenses by a full 10%.

Which of the following, if true, most undermines the accountant’s argument?

A. The cost of a computer is a one-time cost and would therefore not affect the company’s recurring monthly expenses.

B. Many sales appointments can be conducted via free video conferencing software, thereby reducing the expenses related to mileage reimbursement.

C. The company’s closest competitor employs nearly twice as many salespeople.

D. Because of the demand for the company’s products, a new salesperson is likely to account for several times as much revenue as the cost of employing her.

E. The company will not be able to reduce its existing expenses by enough to counterbalance the costs of a new salesperson.

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Originally posted by Bunuel on 18 Jul 2018, 19:40.
Last edited by Skywalker18 on 23 Jul 2018, 23:11, edited 1 time in total.
formatted
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Re: Accountant: This company simply cannot afford to hire a new salesperso  [#permalink]

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18 Jul 2018, 19:46
It should be D, D introduce the case in which the revenue she made will outweight the cost, therefore counter the conclusion that the company cannot afford her.
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Re: Accountant: This company simply cannot afford to hire a new salesperso  [#permalink]

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18 Jul 2018, 19:50
Accountant: This company simply cannot afford to hire a new salesperson. \ With salespeople we not only incur the salary and healthcare costs, but also the costs of a new computer, a business cell phone plan, and mileage reimbursement for driving to sales appointments. This new salesperson could raise our monthly expenses by a full 10%.

Which of the following, if true, most undermines the accountant’s argument?

A. The cost of a computer is a one-time cost and would therefore not affect the company’s recurring monthly expenses.
We are just looking at only one part of the expenses .....

B. Many sales appointments can be conducted via free video conferencing software, thereby reducing the expenses related to mileage reimbursement.
Again, just one part of the expense are being addressed. These expenses may account for a very small %

C. The company’s closest competitor employs nearly twice as many salespeople
out of scope. We can't compare a different company as the environment and expense may be different.

D. Because of the demand for the company’s products, a new salesperson is likely to account for several times as much revenue as the cost of employing her.
Correct... Now this tells us that revenue that will be generated by that salesperson will be far more than expenses incurred

E. The company will not be able to reduce its existing expenses by enough to counterbalance the costs of a new salesperson.
opposite of what we are looking at

D
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Re: Accountant: This company simply cannot afford to hire a new salesperso  [#permalink]

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18 Jul 2018, 22:31
Accountant: This company simply cannot afford to hire a new salesperson. With salespeople we not only incur the salary and healthcare costs, but also the costs of a new computer, a business cell phone plan, and mileage reimbursement for driving to sales appointments. This new salesperson could raise our monthly expenses by a full 10%.

Type- Weaken
Boil it down - This company simply cannot afford to hire a new salesperson since this new salesperson could raise our monthly expenses by a full 10%.

A. The cost of a computer is a one-time cost and would therefore not affect the company’s recurring monthly expenses. - Incorrect- there are several other costs besides the cost of computer

B. Many sales appointments can be conducted via free video conferencing software, thereby reducing the expenses related to mileage reimbursement. - Incorrect - same as A

C. The company’s closest competitor employs nearly twice as many salespeople. - Irrelevant

D. Because of the demand for the company’s products, a new salesperson is likely to account for several times as much revenue as the cost of employing her. - Correct - so the new salesperson will lead to increase in net profit

E. The company will not be able to reduce its existing expenses by enough to counterbalance the costs of a new salesperson. - Incorrect - this goes against employing the salesperson but still does not address the output of this new employee

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Posts: 51097
Re: Accountant: This company simply cannot afford to hire a new salesperso  [#permalink]

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22 Jul 2018, 08:08
Bunuel wrote:
Accountant: This company simply cannot afford to hire a new salesperson. \ With salespeople we not only incur the salary and healthcare costs, but also the costs of a new computer, a business cell phone plan, and mileage reimbursement for driving to sales appointments. This new salesperson could raise our monthly expenses by a full 10%.

Which of the following, if true, most undermines the accountant’s argument?

A. The cost of a computer is a one-time cost and would therefore not affect the company’s recurring monthly expenses.

B. Many sales appointments can be conducted via free video conferencing software, thereby reducing the expenses related to mileage reimbursement.

C. The company’s closest competitor employs nearly twice as many salespeople.

D. Because of the demand for the company’s products, a new salesperson is likely to account for several times as much revenue as the cost of employing her.

E. The company will not be able to reduce its existing expenses by enough to counterbalance the costs of a new salesperson.

VERITAS PREP OFFICIAL SOLUTION:

In this Weaken question, the accountant argues that "we cannot afford to hire a new salesperson," and then lists as premises the various costs that would add up to a 10% cost increase for the company. What is the gap in logic? Costs are only one part of the profit equation: there's also revenue. And the argument doesn't talk at all about the revenue that this new salesperson could bring in. You should seize on that gap and scan the argument for reasons that revenues would increase more than the costs would.

Choice (D) offers exactly that: if a new salesperson would bring in much more than it costs to employ her, the conclusion crumbles. (D) is correct.

Among the other choices:

(A) and (B) each only address one of the many costs of employing the new salesperson, so you're still stuck with the negative premise that monthly costs will be up by 10%. Remember: you cannot argue with the premises, only with the validity of the conclusion.

(C) misses the scope of the argument, which is only about whether the company can afford this new salesperson. Whether or not other companies can afford more employees doesn't factor in to this particular analysis of one company's financial situation.

And (E) actually strengthens the argument, if anything, demonstrating that the 10% incremental cost is unlikely to be mitigated by other savings.
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Re: Accountant: This company simply cannot afford to hire a new salesperso &nbs [#permalink] 22 Jul 2018, 08:08
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