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# Bonuses at DSR Industries cannot be awarded unless profits

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Intern
Joined: 04 Jun 2012
Posts: 49
Bonuses at DSR Industries cannot be awarded unless profits  [#permalink]

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10 Jun 2013, 00:31
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Difficulty:

15% (low)

Question Stats:

75% (01:04) correct 25% (01:07) wrong based on 467 sessions

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Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent
return on stock- holders’ investments in the company. Higher profits mean
higher bonuses. Therefore, bonuses in a year of general economic recession will
be considerably lower than bonuses in a year of peak profits at DSR.

The conclusion above depends on the assumption that

(A) the firm will have relatively low profits in recession years
(B) the amount represented by a ten percent return on stockholders’
investments in the company will increase from year to year
(C) profits rarely exceed a ten percent return on stockholders’ investments in
the company
(D) profits in excess of a ten percent return on stockholders’ investments in the
company are all distributed in the form of bonuses
(E) bonuses at DSR never drop to zero
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Re: Bonuses at DSR Industries cannot be awarded unless profits e  [#permalink]

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12 Jun 2013, 05:18
soniedarshan wrote:
Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent
return on stock- holders’ investments in the company. Higher profits mean
higher bonuses. Therefore, bonuses in a year of general economic recession will
be considerably lower than bonuses in a year of peak profits at DSR.

The conclusion above depends on the assumption that

(A) the firm will have relatively low profits in recession years
(B) the amount represented by a ten percent return on stockholders’
investments in the company will increase from year to year
(C) profits rarely exceed a ten percent return on stockholders’ investments in
the company
(D) profits in excess of a ten percent return on stockholders’ investments in the
company are all distributed in the form of bonuses
(E) bonuses at DSR never drop to zero

Has to Be A
An easy one, served as a refresher for the brain after solving many 700 level questions
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Manager
Joined: 05 Dec 2014
Posts: 211
Location: India
GMAT 1: 690 Q48 V36
GPA: 3.54
Re: Bonuses at DSR Industries cannot be awarded unless profits  [#permalink]

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27 Nov 2017, 11:05
Hi option A states that the firm will have relatively low profits in recession years. If the profit is suppose 1 %, which does not exceed a ten percent return on stock- holders??? investments in the company. So, there will be no bonuses to award. But, in the argument we have-Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR. So, option A needs not to be true. Option E makes sense to me. Kindly help.
Manager
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Location: United States
Concentration: General Management, Finance
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Re: Bonuses at DSR Industries cannot be awarded unless profits  [#permalink]

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09 Jan 2018, 23:53
Low profit mean it can be even 5% return which is still profit then why company will give bonus for me it is E kindly help
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Manager
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Re: Bonuses at DSR Industries cannot be awarded unless profits  [#permalink]

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09 Jan 2018, 23:54
Although I agree E is using very strong language by saying never
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Intern
Joined: 15 Apr 2018
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Re: Bonuses at DSR Industries cannot be awarded unless profits  [#permalink]

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24 Apr 2018, 22:22
As it's said in the argument bonuses are relatively lower, We can say that bonused will never drop to zero. What's the flaw in this statement? Why not E?
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Re: Bonuses at DSR Industries cannot be awarded unless profits  [#permalink]

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25 Apr 2018, 06:15
Top Contributor
himanshuezdi wrote:
As it's said in the argument bonuses are relatively lower, We can say that bonused will never drop to zero. What's the flaw in this statement? Why not E?

Hi,

Profits may not exceed a ten percent return on stock- holders’ investments in the company.

So,we can't say or assume extremely bonus will never drop to zero.

Thanks.
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Re: Bonuses at DSR Industries cannot be awarded unless profits &nbs [#permalink] 25 Apr 2018, 06:15
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