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# Company X, whose two divisions provide IT consultancy and IT

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Joined: 02 Aug 2013
Posts: 94
Company X, whose two divisions provide IT consultancy and IT  [#permalink]

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08 Jul 2014, 06:53
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Difficulty:

25% (medium)

Question Stats:

75% (01:38) correct 25% (01:48) wrong based on 481 sessions

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Source : A local GMAT center

Company X, whose two divisions provide IT consultancy and IT maintenance services respectively, recently reported a 26% jump in its second quarter revenues. During this period, the revenues from its consultancy business grew by nearly 40%

Which of the following statements is best supported by the information above?

A. Company X has shifted its focus from being a maintenance service provider to being a consultancy service provider.
B. Company X's consultancy division has surpassed the benchmarks set by the company.
C. The number of customers who bought Company X's consultancy services is more than the numbers of customers who bought its maintenance service.
D. Company X's consultancy business is more profitable than its maintenance business.
E. Company X's revenues from its maintenance business grew at a smaller rate than its overall revenues.

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Re: Company X, whose two divisions provide IT consultancy and IT  [#permalink]

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02 Sep 2014, 23:52
Can anyone pls explain why not D ?
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Joined: 15 Sep 2013
Posts: 33
Concentration: Strategy, Entrepreneurship
GMAT 1: 680 Q47 V36
GMAT 2: 740 Q50 V40
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Re: Company X, whose two divisions provide IT consultancy and IT  [#permalink]

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03 Sep 2014, 01:11
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monty6000 wrote:
Can anyone pls explain why not D ?

The question stems refers to the %age increase in the the revenues. Profits = Revenues - Input Cost. Here we do not know the input cost of both the divisions. Thus although the revenues of one division has increased over the last year that does not say anything about the increase or decrease in profits. Increase in revenues of one division also does not give any insight into the comparison of profits of the two divisions
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Re: Company X, whose two divisions provide IT consultancy and IT  [#permalink]

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17 Sep 2015, 10:04
can anyone pls give a more detailed explaination
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Re: Company X, whose two divisions provide IT consultancy and IT  [#permalink]

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10 Nov 2015, 11:34
1
Company X, whose two divisions provide IT consultancy and IT maintenance services respectively, recently reported a 26% jump in its second quarter revenues. During this period, the revenues from its consultancy business grew by nearly 40%

Which of the following statements is best supported by the information above?

A. Company X has shifted its focus from being a maintenance service provider to being a consultancy service provider. - focus of company is Out of scope. This statement could be true, but not necessarily hold good.
B. Company X's consultancy division has surpassed the benchmarks set by the company. - no visibility in stimulus on benchmark
C. The number of customers who bought Company X's consultancy services is more than the numbers of customers who bought its maintenance service. - no visibility on number of customers. Could be true again, but not discussed in stimulus
D. Company X's consultancy business is more profitable than its maintenance business. - Profit is different from revenues. out of scope
E. Company X's revenues from its maintenance business grew at a smaller rate than its overall revenues. - considering % growth of company & consultancy business, this statement can be inferred
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Joined: 11 Mar 2015
Posts: 35
Re: Company X, whose two divisions provide IT consultancy and IT  [#permalink]

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15 Apr 2018, 08:34
monty6000 wrote:
Can anyone pls explain why not D ?

It does not need to be more profitable over another. If profit margins are same and the company provides more consultancy services than maintenance services then the company can earn more profit from consultancy.
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Re: Company X, whose two divisions provide IT consultancy and IT  [#permalink]

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27 Apr 2018, 21:35
bschool17 wrote:
Source : A local GMAT center

Company X, whose two divisions provide IT consultancy and IT maintenance services respectively, recently reported a 26% jump in its second quarter revenues. During this period, the revenues from its consultancy business grew by nearly 40%.

Which of the following statements is best supported by the information above?

A. Company X has shifted its focus from being a maintenance service provider to being a consultancy service provider.

B. Company X's consultancy division has surpassed the benchmarks set by the company.

C. The number of customers who bought Company X's consultancy services is more than the numbers of customers who bought its maintenance service.

D. Company X's consultancy business is more profitable than its maintenance business.

E. Company X's revenues from its maintenance business grew at a smaller rate than its overall revenues.

Using POE:

A. No info from the passage supports this.

B. Do we know the bench marks? No.

C. Do we know the number of customers? No

D. We don't know the actual figures to compare this.

E. This can be inferred clearly from the passage.
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Re: Company X, whose two divisions provide IT consultancy and IT &nbs [#permalink] 27 Apr 2018, 21:35
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# Company X, whose two divisions provide IT consultancy and IT

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