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# Company Spokesperson: This year, more than 70% of the guests

Author Message
Manager
Status: Sick of Refreshing Email
Joined: 10 Mar 2011
Posts: 97

Kudos [?]: 90 [0], given: 3

Location: United States (TX)
Concentration: Finance, Economics
GMAT 1: 690 Q48 V35
GMAT 2: 690 Q50 V33
GMAT 3: 730 Q50 V39
GPA: 3.6
WE: Information Technology (Consulting)
Company Spokesperson: This year, more than 70% of the guests [#permalink]

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24 Jul 2011, 18:22
00:00

Difficulty:

15% (low)

Question Stats:

85% (01:14) correct 15% (01:20) wrong based on 64 sessions

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Company Spokesperson: This year, more than 70% of the guests who stayed with us over the past summer are planning to return to our resorts for a summer vacation. Therefore, I believe that we are well-positioned for another strong and profitable quarter.

Industry Analyst: This is not necessarily true. Nearly three quarters of the company’s profits come from the attendance of its theme parks located at its major resorts, and it is not certain how this segment will perform this summer.

Which of the following statements, if true, would support the criticism of the Industry Analyst?

(I am confused about the word "criticism" in the qusn - Does it want us to pick an option which supports the criticism done by Analyst or an option which criticizes the Analyst?)

a. The company’s management possesses more accurate financial information than is accessible to industry analysts. -- THIS CRITICIZES the ANALYST
b. The industry analyst represents an independent investment firm, which is not affiliated with the company.
c. The company’s revenues and profits have more than doubled over the past 3 years.
d. Because of the seasonality in the vacation travel and theme park attendance, summer is the most important season for the firm’s operations, accounting for over half of the firm's annual profits.
e. The vast majority of guests who visit the company’s resorts attend its theme parks only once, usually during their first week of stay. -- THIS SUPPORTS THE CRITICISM DONE BY ANALYST
[Reveal] Spoiler: OA

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Kudos [?]: 90 [0], given: 3

Senior Manager
Joined: 24 Mar 2011
Posts: 428

Kudos [?]: 223 [0], given: 20

Location: Texas

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24 Jul 2011, 18:40
vatsas wrote:
Company Spokesperson: This year, more than 70% of the guests who stayed with us over the past summer are planning to return to our resorts for a summer vacation. Therefore, I believe that we are well-positioned for another strong and profitable quarter.

Industry Analyst: This is not necessarily true. Nearly three quarters of the company’s profits come from the attendance of its theme parks located at its major resorts, and it is not certain how this segment will perform this summer.

Which of the following statements, if true, would support the criticism of the Industry Analyst?

(I am confused about the word "criticism" in the qusn - Does it want us to pick an option which supports the criticism done by Analyst or an option which criticizes the Analyst?)

a. The company’s management possesses more accurate financial information than is accessible to industry analysts. -- THIS CRITICIZES the ANALYST
b. The industry analyst represents an independent investment firm, which is not affiliated with the company.
c. The company’s revenues and profits have more than doubled over the past 3 years.
d. Because of the seasonality in the vacation travel and theme park attendance, summer is the most important season for the firm’s operations, accounting for over half of the firm's annual profits.
e. The vast majority of guests who visit the company’s resorts attend its theme parks only once, usually during their first week of stay. -- THIS SUPPORTS THE CRITICISM DONE BY ANALYST

you have the answer of your confusion in the highlighted portion, i think the portion highlighted is the one that is asked... what supports the analyst statement?
all other statements A to D are against analyst's statement. Only E strengthens his reply to the company person.

Last edited by agdimple333 on 25 Jul 2011, 07:49, edited 1 time in total.

Kudos [?]: 223 [0], given: 20

Senior Manager
Joined: 03 Mar 2010
Posts: 415

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25 Jul 2011, 03:37
Paraphrasing
Company Spokesperson: Company earn profit from guest who STAYS at company's resort. 70% guest are returning customer who will STAY at company's resort this summer. hence company will be profitable in coming summer quarter.

Industry Analyst: 75% of company's profit comes from the attendance of its theme parks and only 25% comes from guest who STAYS at company's resort. And this summer its uncertain how many guest will attend theme park at company's resort. Hence Industry Analyst is criticizing Company Spokesperson's statement that company will be profitable in coming summer quarter.

We are asked to find an answer choice that would support the Industry Analyst criticism.

a. The company’s management possesses more accurate financial information than is accessible to industry analysts.
This is kind of weakener. If that's the case, Company spokesperson is in better position to forecast company's profit.
b. The industry analyst represents an independent investment firm, which is not affiliated with the company.
Out of scope
c. The company’s revenues and profits have more than doubled over the past 3 years.
Irrelevant. If anything, you would expect company to be profitable this year as well. It doesn't mention the cause why company will be profitable.
d. Because of the seasonality in the vacation travel and theme park attendance, summer is the most important season for the firm’s operations, accounting for over half of the firm's annual profits.
True and 70% of guest are returning as well. But are they going to visit theme park more often or are they just going to come and STAY at company's resort which is not profitable. Eliminate.
e. The vast majority of guests who visit the company’s resorts attend its theme parks only once, usually during their first week of stay.
Bingo! According to analyst, theme park is company's cash cow. But if company have very few visitors to theme park then the prediction that company will be profitable is not true.
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Manager
Status: GMAT BATTLE - WIN OR DIE
Joined: 02 May 2011
Posts: 161

Kudos [?]: 118 [0], given: 13

Concentration: General Management, Entrepreneurship
GMAT Date: 12-22-2011
GPA: 3.81
WE: General Management (Hospitality and Tourism)

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25 Jul 2011, 06:29
+ 1 for E.

Because only support the analyst argument.

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Senior Manager
Joined: 05 Jul 2011
Posts: 315

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Location: United States (CA)
Concentration: Marketing, Entrepreneurship
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GMAT 3: 730 Q50 V40

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25 Jul 2011, 20:03
+1 for E
all other options did not support the analyst at all
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Manager
Joined: 26 Sep 2010
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07 Aug 2011, 02:12
nice ques. +1 for E

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Re: Critisim   [#permalink] 07 Aug 2011, 02:12
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# Company Spokesperson: This year, more than 70% of the guests

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