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# Bonuses at DSR Industries cannot be awarded unless profits

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Manager
Joined: 04 Jun 2012
Posts: 54

Kudos [?]: 29 [0], given: 5

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

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10 Jun 2013, 00:31
00:00

Difficulty:

15% (low)

Question Stats:

74% (01:10) correct 26% (01:14) wrong based on 151 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

Kudos [?]: 29 [0], given: 5

Current Student
Joined: 24 Aug 2011
Posts: 1436

Kudos [?]: 1312 [0], given: 820

Location: India
Concentration: Technology, Strategy
GMAT 1: 760 Q50 V42
GPA: 3.35
WE: Consulting (Computer Software)
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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Kudos [?]: 1312 [0], given: 820

Re: Bonuses at DSR Industries cannot be awarded unless profits e   [#permalink] 12 Jun 2013, 05:18
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