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# Don s, a chain of supermarkets, has entered into an

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Manager
Joined: 10 Jan 2006
Posts: 114
Don s, a chain of supermarkets, has entered into an [#permalink]

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06 Apr 2006, 12:45
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Donâ€™s, a chain of supermarkets, has entered into an agreement in which Rose Computers will sell Donâ€™s an unlimited number of its least expensive PCâ€™s at one-fourth the regular wholesale price. In return, Donâ€™s has agreed to purchase all of its scanners and other electronic information-processing equipment from Rose or from Omicron, Rose Computersâ€™ parent company, for the next ten years. Donâ€™s will offer a Rose PC free to any school that turns in Donâ€™s register receipts totaling \$100,000 within the next six months. The vice-president in charge of advertising for Donâ€™s expects that the computer giveaway will obviate the need for a massive new advertising campaign for the next six months and that Donâ€™s can make up the expenditures for the PCâ€™s by writing them off its income taxes as charitable donations.

The plans formulated by Donâ€™s assume each of the following EXCEPT:
(A) The prices that Rose or Omicron charges Donâ€™s for information-processing equipment over the next ten years will be lower than those charged by other companies.
(B) The tax laws will not be changed to exclude or lessen the value of charitable donations as tax write-offs.
(C) Schools will be sufficiently attracted by Donâ€™s computer giveaway offer that teachers will urge students to shop at Donâ€™s.
(D) Rose will be able to supply Donâ€™s with a sufficient number of PCâ€™s to meet the demand generated by schools that collect Donâ€™s receipts totaling \$100,000.
(E) The effect of the computer giveaway offer on Donâ€™s business will be comparable to that of a major advertising campaign.
Manager
Joined: 28 Dec 2005
Posts: 117

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06 Apr 2006, 13:48
I want to say D.

(A) The prices that Rose or Omicron charges Donâ€™s for information-processing equipment over the next ten years will be lower than those charged by other companies.
<I think this is out of scope, we don't care about rose or omincron's competiros and their prices>

(B) The tax laws will not be changed to exclude or lessen the value of charitable donations as tax write-offs.
<We don't care about changing tax laws as long as Don't can write off charitable donations.>

(C) Schools will be sufficiently attracted by Donâ€™s computer giveaway offer that teachers will urge students to shop at Donâ€™s.
<Don assume that increased spending will occur because of the computer giveaway.>

(D) Rose will be able to supply Donâ€™s with a sufficient number of PCâ€™s to meet the demand generated by schools that collect Donâ€™s receipts totaling \$100,000.
<If Rose runs out of PC's to giveaway, then Don's cannot donate PC and thus cannot write off the expenditures and will not attract customers.>

(E) The effect of the computer giveaway offer on Donâ€™s business will be comparable to that of a major advertising campaign.
<The passage states that the giveaway will obviate the need for advertising so this is assumed in the plan.>
Director
Joined: 24 Oct 2005
Posts: 659
Location: London

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07 Apr 2006, 02:27
I am going for A.
The price of the scanners and other electronic information-processing is not assumed to be high or low.
Director
Joined: 13 Nov 2003
Posts: 789
Location: BULGARIA

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07 Apr 2006, 06:30
I would go for B)
Intern
Joined: 20 Feb 2006
Posts: 45

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07 Apr 2006, 11:26
C

computer giveaway is for the schools, not for individual students who are considered retail shopper.
Senior Manager
Joined: 07 Mar 2006
Posts: 352

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07 Apr 2006, 11:29
I'll go for B.
Manager
Joined: 10 Jan 2006
Posts: 114

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07 Apr 2006, 12:54
OA is 'A'
07 Apr 2006, 12:54
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