Federal law prohibits businesses from reimbursing any

Question

Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes. Thus, many American companies themselves purchase private aircraft. The vast majority of the business aviation fleet is owned by small and mid-size businesses, and flights are strictly for business purposes, with mostly mid-level employees on board. These companies and their boards of directors are in full compliance with the law and with what is best for their businesses.

Which of the following can be most properly inferred from the statements above?

E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.

Which of the following can be most properly inferred from the statements above?

A) The Federal law in question costs businesses money. 
B) Most executives would rather fly on company owned planes than on commercial airlines. 
C) Large businesses usually have their executives fly first or business class on commercial flights. 
D) Upper level executives are less often in compliance with the law. 
E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.

amp0201 · Accepted Answer

A) The Federal law in question costs businesses money.
  -- Though the federal law in question initially cost money to the business, eventually its beneficial for the business. They save money since they don't have to reimburse the money to their employees. Hence A is not a correct answer choice.

B) Most executives would rather fly on company owned planes than on commercial airlines.
  -- New information. Hence B cannot be a correct answer choice.

C) Large businesses usually have their executives fly first or business class on commercial flights.
  -- Nothing is mentioned about the large businesses. Hence C is a not a correct answer choice.

D) Upper level executives are less often in compliance with the law.
  -- Nothing is mentioned about upper level executives. Hence D cannot be a correct answer choice.

E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law. 
  -- This is a correct answer choice. Since most mid-level executives travel in company's private jet, according to law they are not supposed to be reimbursed their money. 
Thank You.

Thanks,
Akhil M.Parekh

Bunuel · Answer

OFFICIAL EXPLANATION

According to the statements, the companies that own private aircraft for business use are fully in compliance with the relevant law, which is summarized. A correct inference will be a statement that must follow from at least part of the premises given.

(A) It does not have to be true that the law costs the businesses money, as no evidence about the relative costs is given.

(B) This choice is an irrelevant comparison, as the preferences of the executives are not the concern of the statements.

(C) This choice does not have to follow, as there is no information given about the travel arrangements made by large companies. The statements only indicate that the majority of private planes are not owned by large companies.

(D) There is no information given about the travel arrangements of upper level executives and no reason to believe that those with the companies discussed do not comply with their companies’ policies.

(E) CORRECT.  If, as the statements indicate, the companies are in full compliance with this law, it must be true that the executives following their guidelines also are.

onedayill · Answer

Its between A & E.
rest all can be ignored.

A incorrect --> no evidence about relative costs.

E correct -- > the executives following the company's guidelines also are fully complying with the law.

It's clearly stated that mid level employees use flights owned by the business

Hope this helps ~~~

TehJay · Answer

Tricky one. (E).

VeritasPrepBrandon · Answer

This inference question combines two of the premises in the stimulus. The first is sentence one: "Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes." The second is the last sentence: "These companies and their boards of directors are in full compliance with the law and with what is best for their businesses."

If these employees are in full compliance with the law, and law prohibits employees from being reimbursed, then these employees must not be being reimbursed. This is answer choice E.

I hope this helps!!!

If these employees are in full compliance with the law, and law prohibits employees from being reimbursed, then these employees must not be being reimbursed. This is answer choice E.

I hope this helps!!!

semwal · Answer

Due to Federal law companies tells its employee ---- If you use your own aircraft for business purpose you wont get reimbursement....probably because reimbursement will be higher than economy class ticket on commercial airline...
 
 Instead, many American companies themselves purchase private aircraft. You can't be paid reimbursement for what you have'nt spent....

so i dont violate the law for receiving free ride and not receiving reimbursement...rightfully so as i don't have any bills to put my claim....

WHAT CAN BE INFERRED...... 
A) The Federal law in question costs businesses money. In a long run ...this arrangement may be cheaper... .INCORRECT 
B) Most executives would rather fly on company owned planes than on commercial airlines. ... WHO KNOW'S? INCORRECT 
C) Large businesses usually have their executives fly first or business class on commercial flights. .. .NOWHERE INFERRED... INCORRECT... 
D) Upper level executives are less often in compliance with the law. ........ NOWHERE INFERRED... INCORRECT... 
E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law....  CORRECT....

mallya12 · Answer

I understand why E is correct.

But giving A a thought, because businesses are buying private aircraft doesn't the law indirectly cost the businesses?

MartyTargetTestPrep · Answer

You ask a great question, Mallya.

(A) is a very tempting choice. Why? Because what the passage says indicates that the law indirectly forces companies to buy private aircraft because they are not in a position to reimburse employees for use of private aircraft, and a quite reasonable next step is to think is that purchasing aircraft is likely more expensive than reimbursing employees for use of planes. We would base this conclusion on the assumption that, if buying aircraft didn't cost more than reimbursing employees for use of aircraft, companies would buy aircraft rather than reimburse even if the law didn't require them to do so.

However, what the passage says does not fully support the conclusion that purchasing costs more than reimbursing. The passage does not say anything about the relative costs, and it could be the case that purchasing an aircraft turns out to cost no more than reimbursing employees for use of private aircraft.

Since what the passage says does not indicate that it has to be true that purchasing aircraft costs companies more than would reimbursing employees for use of aircraft, (A) is not the correct answer, because the answer to an Inference question has to be a conclusion that must be true if what the passage says is true.

systemsav · Answer

Let's go through the part of the stimulus in question and the answer choice: Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes" A) The Federal law in question costs businesses money. This is a tempting choice and is a strong contender at first look for sure. But the simple fact here is that compliance with the law costs the businesses money. The law in itself doesn't cost the businesses money. Say the law is implemented, executives could also fly commercial which would've saved these companies money! The law would still stand. The overreaching conclusion with this option could also be that the law costs the businesses more than what the reimbursement setup would. But that's untrue because a company could have paid more in reimbursements than owning its own fleet of aircraft. Also, the presence of ' Option E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law ' by itself provides a safe bet for an MBT/Inference/Conclusion question. And direct, safe bets are all you need to consider in MBT questions . Hope this clears it up

IanStewart · Answer

This question doesn't make any sense. The right answer is meant to be E, but there are only two sentences in the stem that discuss compliance with the law. The first is this one:

Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes.

which only describes what is illegal for businesses, and which is irrelevant regardless, because answer E is about flights on company planes, not about flights on employee-owned planes.

So if we can infer answer E, it must be from this sentence:

These companies and their boards of directors are in full compliance with the law

But this only tells us that companies and high-level executives comply with the law. It tells us nothing about mid-level employees.

So there's nothing in the question that lets us infer anything about how law-abiding mid-level employees are. But then consider what E says:

E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.

How is this conceivably an inference? How could it be false, even without the passage? Are we imagining that in some countries the law might absolutely require employees to be reimbursed for company flights, and that in those countries employees would be breaking the law if they were not reimbursed? How is that even plausible? Of course employees who pay out of their own pocket aren't breaking the law. We don't need a passage of any kind to "infer" that. It's a bit like if an answer said "by not robbing a bank, Tina was complying with the law." Obviously that's true; it's not something you'd ever need a passage to infer, unless you imagine in some worlds the law requires people to rob banks.

PyjamaScientist · Answer

+1
I totally agree with Ian. This correct answer choice is flawed.

sameermlht · Answer

Agree with your explanation, but the wordplay is too intricate to tell the difference. Differentiating a law costing money and the compliance costing money is like pulling a needle from a haystack.

VerbalBot · Answer

Automated notice from GMAT Club VerbalBot: 

A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.

 This post was generated automatically.

Federal law prohibits businesses from reimbursing any

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

GMAT Critical Reasoning (CR) Questions

Federal law prohibits businesses from reimbursing any

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia