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# Bonuses at DSR Industries cannot be awarded unless profits

Author Message
Senior Manager
Joined: 19 Feb 2004
Posts: 413

Kudos [?]: 39 [0], given: 0

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

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07 Apr 2004, 06:58
00:00

Difficulty:

(N/A)

Question Stats:

80% (00:44) correct 20% (00:00) wrong based on 10 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 reces-
sion 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

Kudos [?]: 39 [0], given: 0

GMAT Club Legend
Joined: 15 Dec 2003
Posts: 4284

Kudos [?]: 537 [0], given: 0

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07 Apr 2004, 08:46
obviously, A
_________________

Best Regards,

Paul

Kudos [?]: 537 [0], given: 0

SVP
Joined: 30 Oct 2003
Posts: 1788

Kudos [?]: 114 [0], given: 0

Location: NewJersey USA

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07 Apr 2004, 12:44
A I guess.

The profits are relatively low and are above 10%

Kudos [?]: 114 [0], given: 0

07 Apr 2004, 12:44
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# Bonuses at DSR Industries cannot be awarded unless profits

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