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# An electric-power company gained greater profits and

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SVP
Joined: 14 Dec 2004
Posts: 1681

Kudos [?]: 168 [0], given: 0

An electric-power company gained greater profits and [#permalink]

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22 Feb 2006, 08:20
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Question Stats:

0% (00:00) correct 100% (01:10) wrong based on 2 sessions

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An electric-power company gained greater profits and provided electricity to consumers at lower rates per unit of electricity by building larger-capacity more efficient plants and by stimulating greater use of electricity within its area. To continue these financial trends, the company planned to replace an old plant by a plant with triple the capacity of its largest plant.

The companyâ€™s plan as described above assumed each of the following EXCEPT:

(A) Demand for electricity within the companyâ€™s area of service would increase in the future.
(B) Expenses would not rise beyond the level that could be compensated for by efficiency or volume of operation, or both.
(C) The planned plant would be sufficiently reliable in service to contribute a net financial benefit to the company as a whole.
(D) Safety measures to be instituted for the new plant would be the same as those for the plant it would replace.
(E) The tripling of capacity would not result in insuperable technological obstacles to efficiency.

Kudos [?]: 168 [0], given: 0

Director
Joined: 17 Dec 2005
Posts: 544

Kudos [?]: 40 [0], given: 0

Location: Germany

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22 Feb 2006, 09:33
We know nothing about safety issues, I choose D

Kudos [?]: 40 [0], given: 0

Manager
Joined: 20 Feb 2006
Posts: 214

Kudos [?]: 17 [0], given: 0

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22 Feb 2006, 19:14
I too choose (D). If we negate any of the other answer choices, company's strategy to gain more profit by decreasing cost and increasing capacity will fall apart.

Kudos [?]: 17 [0], given: 0

VP
Joined: 07 Nov 2005
Posts: 1115

Kudos [?]: 52 [0], given: 1

Location: India

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22 Feb 2006, 21:49
D for me as well. 'Safety issues' are not directly acting as an assumption.

Kudos [?]: 52 [0], given: 1

CEO
Joined: 20 Nov 2005
Posts: 2892

Kudos [?]: 323 [0], given: 0

Schools: Completed at SAID BUSINESS SCHOOL, OXFORD - Class of 2008

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22 Feb 2006, 23:54
D

I think its b/w C and D.

But this must be D.

C atleast talk about finance but D talks about something (safety) never touched in the argument.
_________________

SAID BUSINESS SCHOOL, OXFORD - MBA CLASS OF 2008

Kudos [?]: 323 [0], given: 0

SVP
Joined: 14 Dec 2004
Posts: 1681

Kudos [?]: 168 [0], given: 0

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23 Feb 2006, 06:47
Yup, the OA is "D"

Kudos [?]: 168 [0], given: 0

23 Feb 2006, 06:47
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