Events & Promotions
|
|
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
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Nov 2007:30 AM PST
-08:30 AM PST
Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
Nov 2211:00 AM IST
-01:00 PM IST
Do RC/MSR passages scare you? e-GMAT is conducting a masterclass to help you learn – Learn effective reading strategies Tackle difficult RC & MSR with confidence Excel in timed test environment- Nov 23
11:00 AM IST
-01:00 PM IST
Attend this free GMAT Algebra Webinar and learn how to master the most challenging Inequalities and Absolute Value problems with ease. 
Nov 2510:00 AM EST
-11:00 AM EST
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors.
18 May 2006, 05:15
Kudos
Bookmarks
N
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
(N/A)
Question Stats:
0% (00:00) correct
0%
(00:00)
wrong
based on 2
sessions
History
Date
Time
Result
Not Attempted Yet
Companies considering new cost-cutting manufacturing process 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.
OA to follow
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.
OA to follow
Archived Topic
Hi there,
This topic has been closed and archived due to inactivity or violation of community quality standards. No more replies are possible here.
Where to now? Join ongoing discussions on thousands of quality questions in our Critical Reasoning (CR) Forum
Still interested in this question? Check out the "Best Topics" block below for a better discussion on this exact question, as well as several more related questions.
Thank you for understanding, and happy exploring!
