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Bonuses at DSR Industries cannot be awarded unless profits

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Joined: 03 Jun 2012
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Bonuses at DSR Industries cannot be awarded unless profits [#permalink]

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New post 09 Jun 2013, 23:31
00:00
A
B
C
D
E

Difficulty:

  15% (low)

Question Stats:

75% (01:08) correct 25% (01:03) wrong based on 212 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
[Reveal] Spoiler: OA

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Re: Bonuses at DSR Industries cannot be awarded unless profits e [#permalink]

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New post 12 Jun 2013, 04:18
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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Kudos [?]: 1320 [0], given: 820

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Posts: 167

Kudos [?]: 5 [0], given: 145

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Re: Bonuses at DSR Industries cannot be awarded unless profits [#permalink]

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New post 27 Nov 2017, 10:05
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.

Kudos [?]: 5 [0], given: 145

Re: Bonuses at DSR Industries cannot be awarded unless profits   [#permalink] 27 Nov 2017, 10:05
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