Companies considering new cost-cutting manufacturing : GMAT Critical Reasoning (CR)
Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

 It is currently 25 Feb 2017, 11:16

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Companies considering new cost-cutting manufacturing

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics
Author Message
TAGS:

### Hide Tags

Director
Joined: 10 Oct 2005
Posts: 528
Location: US
Followers: 1

Kudos [?]: 63 [0], given: 0

Companies considering new cost-cutting manufacturing [#permalink]

### Show Tags

24 Oct 2005, 19:15
00:00

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 1 sessions

### HideShow timer Statistics

Companies considering new cost-cutting manufacturing processes often compare the projected results of making the investment against the alternative of not making the investment with costs, selling prices, and share of market remaining constant.
Which of the following, assuming that each is a realistic possibility, constitutes the most serious disadvantage for companies of using the method above for evaluating the financial benefit of new manufacturing processes?
(A) The costs of materials required by the new process might not be known with certainty.
(B) In several years interest rates might go down, reducing the interest costs of borrowing money to pay for the investment.
(C) Some cost-cutting processes might require such expensive investments that there would be no net gain for many years, until the investment was paid for by savings in the manufacturing process.
(D) Competitors that do invest in a new process might reduce their selling prices and thus take market share away from companies that do not.
(E) The period of year chosen for averaging out the cost of the investment might be somewhat longer or shorter, thus affecting the result.
If you have any questions
you can ask an expert
New!
Director
Joined: 14 Sep 2005
Posts: 993
Location: South Korea
Followers: 2

Kudos [?]: 163 [0], given: 0

### Show Tags

24 Oct 2005, 19:37
(D) is the best answer.

< Link deleted >

Sorry for my having posted a link here.
Didn't notice that it is not right to post a link before discussion.
_________________

Auge um Auge, Zahn um Zahn !

24 Oct 2005, 19:37
Similar topics Replies Last post
Similar
Topics:
11 Companies considering new cost-cutting manufacturing 20 04 Jul 2010, 08:46
Companies considering new cost-cutting manufacturing 3 24 Apr 2010, 12:19
2 Companies considering new cost-cutting manufacturing 3 17 Mar 2010, 19:08
Companies considering new cost-cutting manufacturing 4 09 Apr 2008, 10:39
1) Companies considering new cost-cutting manufacturing 5 13 Jul 2007, 22:19
Display posts from previous: Sort by

# Companies considering new cost-cutting manufacturing

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group and phpBB SEO Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.