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# Cross-border collaboration is experiencing a modest

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Director
Joined: 21 Dec 2009
Posts: 582

Kudos [?]: 840 [0], given: 20

Concentration: Entrepreneurship, Finance
Cross-border collaboration is experiencing a modest [#permalink]

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07 Aug 2010, 07:21
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Difficulty:

85% (hard)

Question Stats:

52% (01:46) correct 48% (02:13) wrong based on 432 sessions

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Cross-border collaboration is experiencing a modest renaissance among smaller international oil cartels based in South America, even if business from a joint venture by several cartels is less brisk and profitable than by a monopoly. One upside of international cooperation is that a combined effort may allow these cartels to jointly win government subsidies in overseas markets where they would not have been able to operate.

Which of the following statements by a South American cartel accountant best fits the situation of South American cartels as described in the passage above?

A. “We would rather earn better percentage of a modest profit than zero percent of a potentially larger profit.”

B. “Our management believes that it is in the best interests of investors that we earn only a percentage of total profits and risk only a percentage of possible losses rather than assuming the entire risk of loss.”

C. “We should cooperate and build goodwill, rather than turn customers against us with unsupervised competition.”

D. “We would prefer to have Middle Eastern cartels work with us here in South America rather than having to participate in joint ventures in their home countries.”

E. “We would rather use our full resources to penetrate a territory than receive lesser profits in joint ventures.”
[Reveal] Spoiler: OA

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Director
Status: Impossible is not a fact. It's an opinion. It's a dare. Impossible is nothing.
Affiliations: University of Chicago Booth School of Business
Joined: 26 Nov 2009
Posts: 954

Kudos [?]: 918 [0], given: 36

Location: Singapore
Concentration: General Management, Finance
Schools: Chicago Booth - Class of 2015
Re: Cross-border collaboration is experiencing a modest renaissa [#permalink]

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07 Aug 2010, 08:54
Straight A - "jointly win government subsidies" is the key. Its better to collaborate than be a looser - "where they would not have been able to operate."

A. “We would rather earn better percentage of a modest profit than zero percent of a potentially larger profit.”

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Manager
Joined: 07 Apr 2009
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Re: Cross-border collaboration is experiencing a modest renaissa [#permalink]

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08 Aug 2010, 00:56
A is good

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VP
Joined: 17 Feb 2010
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Re: Cross-border collaboration is experiencing a modest renaissa [#permalink]

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08 Aug 2010, 14:54
can someone explain why D is incorrect here?

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Manager
Joined: 11 May 2010
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Re: Cross-border collaboration is experiencing a modest renaissa [#permalink]

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08 Aug 2010, 20:38
seekmba wrote:
can someone explain why D is incorrect here?

D is incorrect because it is not mentioned in the premise where the join venture will be, whether it'll be in the home base or in the other's country. The premise only focus on the profitability of the Join venture.

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Senior Manager
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Re: Cross-border collaboration is experiencing a modest renaissa [#permalink]

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23 Aug 2010, 05:20
A looks good

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Manager
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WE 1: 3 (Mining Operations)
Re: Cross-border collaboration is experiencing a modest renaissa [#permalink]

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23 Aug 2010, 06:00
IMO A....
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Kudos [?]: 39 [0], given: 33

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Joined: 01 Oct 2013
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Re: Cross-border collaboration is experiencing a modest [#permalink]

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23 Aug 2015, 16:54
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Intern
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Re: Cross-border collaboration is experiencing a modest [#permalink]

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21 Oct 2015, 08:29
Can someone explain why B is incorrect?

Thanks much!

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Senior Manager
Joined: 09 Feb 2015
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Location: India
Concentration: Social Entrepreneurship, General Management
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GPA: 2.8
Re: Cross-border collaboration is experiencing a modest [#permalink]

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05 Nov 2015, 05:57
angierch wrote:
Can someone explain why B is incorrect?

Thanks much!

" combined effort may allow these cartels to jointly win government subsidies in overseas markets where they would not have been able to operate."

the gist of the argument is make some profit by joint ventures than nothing at all.the above sentence clearly gives that clue.
Option A states that clearly.
whereas option B talks about investors and losses..according to the argument we have no information if they would incur losses.
If they cant operate there is no question of incurring losses in overseas market.
Hence in my opinion it is wrong.

Kudos [?]: 4 [0], given: 197

Senior Manager
Status: Always try to face your worst fear because nothing GOOD comes easy. You must be UNCOMFORTABLE to get to your COMFORT ZONE
Joined: 15 Aug 2014
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Kudos [?]: 91 [0], given: 472

Concentration: Marketing, Technology
GMAT 1: 570 Q44 V25
GMAT 2: 600 Q48 V25
WE: Information Technology (Consulting)
Re: Cross-border collaboration is experiencing a modest [#permalink]

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11 Jul 2016, 22:44
gmatbull wrote:
Cross-border collaboration is experiencing a modest renaissance among smaller international oil cartels based in South America, even if business from a joint venture by several cartels is less brisk and profitable than by a monopoly. One upside of international cooperation is that a combined effort may allow these cartels to jointly win government subsidies in overseas markets where they would not have been able to operate.

Which of the following statements by a South American cartel accountant best fits the situation of South American cartels as described in the passage above?

A. “We would rather earn better percentage of a modest profit than zero percent of a potentially larger profit.”

B. “Our management believes that it is in the best interests of investors that we earn only a percentage of total profits and risk only a percentage of possible losses rather than assuming the entire risk of loss.”

C. “We should cooperate and build goodwill, rather than turn customers against us with unsupervised competition.”

D. “We would prefer to have Middle Eastern cartels work with us here in South America rather than having to participate in joint ventures in their home countries.”

E. “We would rather use our full resources to penetrate a territory than receive lesser profits in joint ventures.”

Can someone explain why 'B' is wrong.
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Kudos [?]: 91 [0], given: 472

Re: Cross-border collaboration is experiencing a modest   [#permalink] 11 Jul 2016, 22:44
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