GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 22 Jun 2018, 19:38

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# During a single hour of a pledge drive for a public radio

Author Message
TAGS:

### Hide Tags

Retired Moderator
Joined: 02 Oct 2009
Posts: 547
GMAT 1: 530 Q47 V17
GMAT 2: 710 Q50 V36
During a single hour of a pledge drive for a public radio [#permalink]

### Show Tags

Updated on: 11 Apr 2010, 21:51
4
00:00

Difficulty:

(N/A)

Question Stats:

54% (01:33) correct 46% (01:31) wrong based on 501 sessions

### HideShow timer Statistics

During a single hour of a pledge drive for a public radio station, anyone making a pledge of a stated amount was given a free gift. Pledges were encouraged by the announcement that the retail cost of the gift was equal to the amount of the pledge. Yet, at the end of the hour, the total money raised from pledges accounted for a larger dollar amount than the amount organizers had paid for all the free gifts.

Which of the following, if true, is the best explanation for the fact that funds raised from pledges during the hour accounted for more money than the cost of the free gifts?

A)The cost of postage was included in the total cost assigned to the gifts, making them seem more expensive to potential donors.

B)Organizers underestimated the amount of money that would be raised during the hour and were surprised by the actual total of pledges.

C)Organizers overestimated the number of donors who would respond to the offer and were forced to offer gifts at half price when there were fewer pledges than expected.

D)Free gifts were donated by a sponsor, eliminating the need to subtract the cost of them from the total money raised through pledges.

E)More money was raised during this hour than during the previous three hours, driving down the average out-of-pocket cost of the free gifts.

Originally posted by RaviChandra on 11 Apr 2010, 11:14.
Last edited by RaviChandra on 11 Apr 2010, 21:51, edited 1 time in total.
Intern
Joined: 15 Mar 2010
Posts: 14

### Show Tags

11 Apr 2010, 20:02
it's D. If oraganizer does not need to pay the cost of the gifts , whatever fund is raised the radio station gets to keep it. so whatever they raise , the station will always be at profit.

Retired Moderator
Joined: 02 Oct 2009
Posts: 547
GMAT 1: 530 Q47 V17
GMAT 2: 710 Q50 V36

### Show Tags

11 Apr 2010, 21:58
OA is D

During a single hour of a pledge drive for a public radio station, anyone making a pledge of a stated amount was given a free gift. Pledges were encouraged by the announcement that the retail cost of the gift was equal to the amount of the pledge. Yet, at the end of the hour, the total money raised from pledges accounted for a larger dollar amount than the amount organizers had paid for all the free gifts.

if we observe the last sentence it clearly says that the gifts are bought...
even thought option D is very convincing i eliminated D thinking they are bought and can not be gifted.....

Can some one explain this!!!!
Senior Manager
Joined: 24 Jul 2009
Posts: 258

### Show Tags

12 Apr 2010, 00:49
RaviChandra wrote:
OA is D

During a single hour of a pledge drive for a public radio station, anyone making a pledge of a stated amount was given a free gift. Pledges were encouraged by the announcement that the retail cost of the gift was equal to the amount of the pledge. Yet, at the end of the hour, the total money raised from pledges accounted for a larger dollar amount than the amount organizers had paid for all the free gifts.

if we observe the last sentence it clearly says that the gifts are bought...
even thought option D is very convincing i eliminated D thinking they are bought and can not be gifted.....

Can some one explain this!!!!

Let me try..!!

AND NOW..

Organizers have to give these gifts to the pledge makers...!! And the any pledge makers will get the "free gift" equivalent to the pledge made.

SO, Let say there 10 pledge makers and each made a pledge \$ 10.. so total worth of gifts to be given by organizers shud worth \$100.

But let say organizers bought only 8 gifts themselves and 2 were offered by the sponsors..>>>> So, effectively Organizers paid less...|>> funds raised from pledges during the hour accounted for more money than the cost of the "free gifts" PAID by the organizers..

Hope it helps..
Manager
Joined: 07 Jan 2010
Posts: 214

### Show Tags

12 Apr 2010, 07:07
We should ask NPR if the scenario is possible
I selected D, but yes it contradicts the premise. Nice attempt to explain Nverma, but I don't think that's enough. "Free gifts were donated by a sponsor" could be mean either way.
Retired Moderator
Joined: 02 Oct 2009
Posts: 547
GMAT 1: 530 Q47 V17
GMAT 2: 710 Q50 V36

### Show Tags

12 Apr 2010, 08:26
Yes verma nice attempt to explain but... Im some how still not convinced with the answer
VP
Joined: 17 Feb 2010
Posts: 1295

### Show Tags

12 Apr 2010, 12:45
very unusual option as OA.

I thought "Free gifts were donated by a sponsor" is a trap....
Manhattan Prep Instructor
Affiliations: ManhattanGMAT
Joined: 21 Jan 2010
Posts: 341
Location: San Francisco

### Show Tags

12 Apr 2010, 14:19
9
1
Hey All,

I got a request to weigh in on this one, but to be honest, I'm unsure where the confusion is. People keep saying that the answer goes against a written premise. It doesn't in the slightest:

During a single hour of a pledge drive for a public radio station, anyone making a pledge of a stated amount was given a free gift. Pledges were encouraged by the announcement that the retail cost of the gift was equal to the amount of the pledge. Yet, at the end of the hour, the total money raised from pledges accounted for a larger dollar amount than the amount organizers had paid for all the free gifts.

This is an "Explain the Discrepancy" question, so all we need to do is write it in our own words.

Discrepancy: Station gives away gift that retails for the same amount as associated pledge, yet station makes profit. How?

Explanation: Pretty obvious that the gifts were donated. This is how the majority of charity auctions are run.

A)The cost of postage was included in the total cost assigned to the gifts, making them seem more expensive to potential donors.
PROBLEM: This doesn't address the issue. Even if cost of postage is included, the station's outlay = pledges if they had to buy the gifts.

B)Organizers underestimated the amount of money that would be raised during the hour and were surprised by the actual total of pledges.

C)Organizers overestimated the number of donors who would respond to the offer and were forced to offer gifts at half price when there were fewer pledges than expected.
PROBLEM: This wouldn't help at all. In fact, it looks like it would hurt the discrepancy.

D)Free gifts were donated by a sponsor, eliminating the need to subtract the cost of them from the total money raised through pledges.
ANSWER: People keep saying this goes against the premise. But the premise never says the gifts were bought. It says "total money raised from pledges accounted for a larger dollar amount than the amount organizers had paid for all the free gifts." That does not imply that they bought them at all. It just says they made more money than they paid. Even if the amount they paid was \$0, this would remain a true premise. I see no contradiction. : )

E)More money was raised during this hour than during the previous three hours, driving down the average out-of-pocket cost of the free gifts.
PROBLEM: Same problem as B.

Hope that helps!

-t
_________________

Tommy Wallach | Manhattan GMAT Instructor | San Francisco

Manhattan GMAT Discount | Manhattan GMAT Reviews

Retired Moderator
Joined: 02 Oct 2009
Posts: 547
GMAT 1: 530 Q47 V17
GMAT 2: 710 Q50 V36

### Show Tags

12 Apr 2010, 19:35
1
Thanks TommyWallach,
Now its very clear
VP
Status: mission completed!
Joined: 02 Jul 2009
Posts: 1349
GPA: 3.77

### Show Tags

07 Jul 2010, 02:31
RaviChandra wrote:
Thanks TommyWallach,
Now its very clear

 "total money raised from pledges accounted for a larger dollar amount than the amount organizers had paid for all the free gifts."

think about that they may have bought all the gifts at a discount from wholesaller.

_________________

Audaces fortuna juvat!

GMAT Club Premium Membership - big benefits and savings

Manager
Joined: 18 Oct 2008
Posts: 156

### Show Tags

07 Jul 2010, 04:33
option D completely resolves the discrepancy found here.
Intern
Joined: 05 Jul 2010
Posts: 22

### Show Tags

07 Jul 2010, 15:04
I agree, D seems to be the most probable.
_________________

If you like my posts please consider giving me KUDOS!!!!!!!!!

Thanks:)

Manager
Joined: 08 Jan 2010
Posts: 153

### Show Tags

03 Aug 2010, 13:29
I was so confused among A B and D ...........finally went with B ............I wouldn't have initially agreed but tommy's explanation is good .......Thanks
Manager
Joined: 04 Feb 2010
Posts: 59
Schools: IESE '13
WE 1: Engineer

### Show Tags

04 Aug 2010, 23:06
had paid does not equal bought ---- actually i read this and was reminded of the stupid joke some people say, when they got something for "free ninety nine" - that's how much they paid (free) not how much they bought it for...
Senior Manager
Status: Fighting on
Joined: 14 Mar 2010
Posts: 298
WE 1: SE - 1
WE 2: Engineer - 3

### Show Tags

06 Aug 2010, 08:31
Answer should be D, as it clearly gives details about cost of gifts = 0 and thereby proving that

cost to get gifts < amount of money from pledges.
Manager
Joined: 23 Sep 2009
Posts: 137

### Show Tags

11 Sep 2010, 17:49
I know this may be a dumb question... The passage claerly says "the total money raised from pledges accounted for a larger dollar amount [highlight]than the amount organizers had paid for all the free gifts[/highlight]."
So it says that they had paid something for the gifts....So how can we assume an answer which is related to donations? please explain?
_________________

Thanks,
VP

Manager
Joined: 02 Jan 2010
Posts: 117

### Show Tags

13 Sep 2010, 02:55
I thought D was a trap...Thinking too much i guess
_________________

Regards
Ganesh
Class of 2012
Great Lakes Institute of Management
http://greatlakes.edu.in

Manhattan Prep Instructor
Affiliations: ManhattanGMAT
Joined: 21 Jan 2010
Posts: 341
Location: San Francisco

### Show Tags

13 Sep 2010, 20:05
Hey Vignes,

Not sure about your question. We're not assuming anything. We're trying to find something that explains the discrepancy, which is that somehow, the association gave away gifts worth the exact amount of the relevant pledges, but ended up making money. The only thing that could explain this is that the charity itself DID NOT pay retail price for the gifts (even though they were WORTH the exact value of the pledge).

-t
_________________

Tommy Wallach | Manhattan GMAT Instructor | San Francisco

Manhattan GMAT Discount | Manhattan GMAT Reviews

Manager
Joined: 23 Sep 2009
Posts: 137

### Show Tags

14 Sep 2010, 15:03
Thank you Tommy. I was thinking too much when answering this question....
_________________

Thanks,
VP

Retired Moderator
Joined: 03 Aug 2010
Posts: 220

### Show Tags

08 Oct 2010, 02:41
Can someone tell why A is wrong.. .because if the cost of the article has been inflated by adding the cost of postage, then naturally, it will be like

Total cost of goods = actual cost + cost of postage ( this is just inflation ) = total pledge

so out flow for procuring goods will not include the cost of postage because no cost is incurred for postage
_________________

http://www.gmatpill.com/gmat-practice-test/

Amazing Platform

Re: Pledge   [#permalink] 08 Oct 2010, 02:41

Go to page    1   2    Next  [ 29 posts ]

Display posts from previous: Sort by