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

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Director
Joined: 06 Jan 2008
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24 May 2008, 07:03
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56% (02:07) correct 44% (01:19) wrong based on 19 sessions

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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 models’ capabilities, Denoma’s advertising spending was higher than normal over the period.
B. For the period at issue, Denoma’s major competitors reported declines in revenue that were, in percentage terms, greater than Denoma’s.
C. A significant proportion of Denoma’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E. During the period, consumer-electronics retailers sold remaining units of Denoma’s superseded models at prices that were deeply discounted from those models’ original prices.

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Director
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24 May 2008, 09:50
C

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CEO
Joined: 17 May 2007
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25 May 2008, 02:47
2
KUDOS
saravalli wrote:
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 models’ capabilities, Denoma’s advertising spending was higher than normal over the period.<-- The argument talks about sales revenue
B. For the period at issue, Denoma’s major competitors reported declines in revenue that were, in percentage terms, greater than Denoma’s. <-- Irrelevant
C. A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers. <-- AHA if it sells to other consumer electronics products and if their revenues are down then Denoma's revenue could be impacted.
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. <-- doesnt explain anything
E. During the period, consumer-electronics retailers sold remaining units of Denoma’s superseded models at prices that were deeply discounted from those models’ original prices. <-- that doesnt help explain reduction of sales revenue, profit maybe, but not revenue.

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Intern
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26 May 2008, 14:33
By POE
A --> The argument is about sales revenue. Not relavant
B --> The argument is about Denoma and not its competitor
C --> It doesnt provide the best possible explanation. Since once you sell the your goods to other manufactures you book profit or loss irrespective of whether the other manufacture sells his goods.
D --> The argument is about consumer electronic industry.
E --> If the earlier models were sold at a discounted price, this could give a explanation of why Denoma's sales revenue was down when compared against retailer's sales revenue.

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Manager
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05 Jan 2011, 14:03
Agree with C what is the OA???

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Manager
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06 Jan 2011, 00:49
C

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Manager
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06 Jan 2011, 03:32
me too C

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Manager
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12 Jun 2011, 01:58
Good question
Denoma toal sales Rev down
But Denoma new model sales rev up

then what caused the total rev down

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Manager
Status: Time to apply!
Joined: 24 Aug 2011
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Location: India
Concentration: Finance, Entrepreneurship
GMAT 1: 600 Q48 V25
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GMAT 3: 690 Q49 V34
GPA: 3.2
WE: Engineering (Computer Software)

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27 Nov 2011, 19:52
bsd_lover wrote:
saravalli wrote:
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 models’ capabilities, Denoma’s advertising spending was higher than normal over the period.<-- The argument talks about sales revenue
B. For the period at issue, Denoma’s major competitors reported declines in revenue that were, in percentage terms, greater than Denoma’s. <-- Irrelevant
C. A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers. <-- AHA if it sells to other consumer electronics products and if their revenues are down then Denoma's revenue could be impacted.
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. <-- doesnt explain anything
E. During the period, consumer-electronics retailers sold remaining units of Denoma’s superseded models at prices that were deeply discounted from those models’ original prices. <-- that doesnt help explain reduction of sales revenue, profit maybe, but not revenue.

Nice explanation ..thanks !
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Senior Manager
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28 Nov 2011, 03:23
+1 for C

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BSchool Forum Moderator
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12 Dec 2011, 22:51
By making components for other electronic manufacturer, the Denoma can raise the revenue although the overall sales does not increase.
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Manager
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19 Jan 2012, 08:32
Got confused with A first. Now I understand that the argument is talking about REVENUES but not PROFITS and hence C is the correct answer.
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Re: Denoma, a major consumer-electronics maker, had a sizeable   [#permalink] 19 Jan 2012, 08:32
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# Denoma, a major consumer-electronics maker, had a sizeable

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