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# Denoma, a major consumer-electronics maker, had a sizeable

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SVP
Joined: 28 May 2005
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24 Dec 2005, 10:47
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Denoma, a major consumer-electronics maker, had a sizeable decline in sales revenue for its most recent fiscal year. This result appears surprising, because electronics retailers report that although their overall sales were considerably lower than in the previous year, their sales revenue from Denoma models actually grew, largely thanks to some innovative and popular models that Denoma introduced.

Which of the following, if true, does most to explain the apparently surprising result?

A. Because of the need to educate the public about its new modelsâ€™ capabilities, Denomaâ€™s advertising spending was higher than normal over the period.
B. For the period at issue, Denomaâ€™s major competitors reported declines in revenue that were, in percentage terms, greater than Denomaâ€™s.
C. A significant proportion of Denomaâ€™s revenue comes from making components for other consumer-electronics manufacturers.
D. Unlike some of its major competitors, Denoma has no lines of business outside consumer electronics to provide revenue when retail sales of consumer electronics are weak.
E. During the period, consumer-electronics retailers sold remaining units of Denomaâ€™s superseded models at prices that were deeply discounted from those modelsâ€™ original prices.
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hey ya......

VP
Joined: 21 Sep 2003
Posts: 1057
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24 Dec 2005, 11:52
I will go with C
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Manager
Joined: 05 Nov 2005
Posts: 227
Location: Germany

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24 Dec 2005, 12:24
Straight C
Director
Joined: 17 Dec 2005
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24 Dec 2005, 13:01
C fits
CEO
Joined: 20 Nov 2005
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Schools: Completed at SAID BUSINESS SCHOOL, OXFORD - Class of 2008

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24 Dec 2005, 17:24
I also go with C but can any body explain me why its not A?
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SAID BUSINESS SCHOOL, OXFORD - MBA CLASS OF 2008

Manager
Joined: 22 Nov 2005
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24 Dec 2005, 19:21
It is definitely C.

dahiya, it is not A because it is out of scope. A is talking about advertising costs whereas the passage is only concerned with revenue.
Director
Joined: 17 Dec 2005
Posts: 547
Location: Germany

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25 Dec 2005, 04:23
The company had a decline in "sales revenue", while the retailers sold more of the company's products.

It is not explicitly stated that the overall profit declined too, thus we cannot assume that the advertising costs were unnormaly high.
Manager
Joined: 12 Nov 2005
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25 Dec 2005, 05:38
I agree with C, but at the same time Why cant the answer be E.

It mentions that retailers have sold the already existing superseded models at reduced prices....which indicates that they might not have bought new models from from Denoma.......
Director
Joined: 10 Oct 2005
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25 Dec 2005, 06:56
I ll go with C!
SVP
Joined: 05 Apr 2005
Posts: 1710

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25 Dec 2005, 08:42
good question. C is correct.........
Re: CR # Denoma   [#permalink] 25 Dec 2005, 08:42
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