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Financial Advisor: Clearly, Capital Coffee is losing money this year
[#permalink]
18 Nov 2014, 08:33
18 Nov 2014, 08:33
8
Kudos
58
Bookmarks
Show timer
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A
B
C
D
E
Difficulty:
55%
(hard)
Question Stats:
55% (01:27) correct
45%
(01:31)
wrong
based on 1833
sessions
Financial Advisor: Clearly, Capital Coffee is losing money this year. In just the last six months, Capital Coffee has closed over three dozen stores nationwide, and may even need to close more in the future.
The Advisor's claim rests on which of the following assumptions?
(A) Domestic coffee sales are outperforming international sales.
(B) All of the store closings were made necessary by low sales volume.
(C) Capital Coffee has not opened more than three dozen stores this year.
(D) All major coffee retailers are losing money this year.
(E) None of Capital Coffee's recently-closed stores had turned a profit in the last two years.
The Advisor's claim rests on which of the following assumptions?
(A) Domestic coffee sales are outperforming international sales.
(B) All of the store closings were made necessary by low sales volume.
(C) Capital Coffee has not opened more than three dozen stores this year.
(D) All major coffee retailers are losing money this year.
(E) None of Capital Coffee's recently-closed stores had turned a profit in the last two years.
The advisor bases his argument that Capital is losing money on the fact that it has closed stores.
Using the Assumption Negation Technique, if C were untrue and Capital had, indeed, opened more than three dozen stores, then the number opened would exceed the number closed, and the evidence would actually be in favor of Capital being more successful.
Answer choice A is out of scope, as even we have no evidence that Capital has a major international business or not.
Choices B and D are each incorrect because they are too absolute; negate either using ANT and the modifier "Not All" does not undermine the conclusion.
Choice E, similarly, is too absolute.
If one of Capital's stores had turned a profit (instead of none), the company could still be losing money this year.
Using the Assumption Negation Technique, if C were untrue and Capital had, indeed, opened more than three dozen stores, then the number opened would exceed the number closed, and the evidence would actually be in favor of Capital being more successful.
Answer choice A is out of scope, as even we have no evidence that Capital has a major international business or not.
Choices B and D are each incorrect because they are too absolute; negate either using ANT and the modifier "Not All" does not undermine the conclusion.
Choice E, similarly, is too absolute.
If one of Capital's stores had turned a profit (instead of none), the company could still be losing money this year.
Manager
Joined: 06 Nov 2012
Status:Manager
Affiliations: Manager
Posts: 100
Given Kudos: 111
Location: India
Concentration: Entrepreneurship, Sustainability
Schools: Boston U '19 (D)
GMAT 1: 650 Q49 V29
GMAT 2: 680 Q49 V33
GPA: 3
WE:Supply Chain Management (Energy and Utilities)
Re: Financial Advisor: Clearly, Capital Coffee is losing money this year
[#permalink]
19 Nov 2014, 01:53
19 Nov 2014, 01:53
16
Kudos
2
Bookmarks
Financial Advisor: Clearly, Capital Coffee is losing money this year. In just the last six months, Capital Coffee has closed over three dozen stores nationwide, and may even need to close more in the future.
The advisor's claim rests on which of the following assumptions?
FA: Losing of money ---> Closing of stores. [X--->Y]
Conc.: more stores will be closed in future.
a) Domestic coffee sales are outperforming international sales - OFS
b) All of the store closings were made necessary by low sales volume - It is Shell answer. Someone says that Low sales volume lead to losing of money which further lead to closing of stores. But, there is difference between low sales volume and losing of money. At one time it may be correct but at other time it may be wrong for e.g. company may still be losing money even when sales would be high and overheads expenses (such as premise rent, staff salary, statutory expenses etc.) also would be high.
c) Capital Coffee has not opened more than three dozen stores this year - Correct. Because those three dozen stores may have been shut down not due to money-losing but due to some other reasons say legal conflict, political issues, natural calamity etc. And simultaneously, CC opened more than three dozens stores at other places.
d) All major coffee retailers are losing money this year - OFS
e) None of Capital Coffee's recently-closed stores had turned a profit in the last two years - Profits are not mentioned in passage
Kudos please....
The advisor's claim rests on which of the following assumptions?
FA: Losing of money ---> Closing of stores. [X--->Y]
Conc.: more stores will be closed in future.
a) Domestic coffee sales are outperforming international sales - OFS
b) All of the store closings were made necessary by low sales volume - It is Shell answer. Someone says that Low sales volume lead to losing of money which further lead to closing of stores. But, there is difference between low sales volume and losing of money. At one time it may be correct but at other time it may be wrong for e.g. company may still be losing money even when sales would be high and overheads expenses (such as premise rent, staff salary, statutory expenses etc.) also would be high.
c) Capital Coffee has not opened more than three dozen stores this year - Correct. Because those three dozen stores may have been shut down not due to money-losing but due to some other reasons say legal conflict, political issues, natural calamity etc. And simultaneously, CC opened more than three dozens stores at other places.
d) All major coffee retailers are losing money this year - OFS
e) None of Capital Coffee's recently-closed stores had turned a profit in the last two years - Profits are not mentioned in passage
Kudos please....
Re: Financial Advisor: Clearly, Capital Coffee is losing money this year
[#permalink]
13 Jul 2015, 07:49
13 Jul 2015, 07:49
9
Kudos
nitinagg29 wrote:
I think answer should be E, As we are talking about "Capital Coffee is losing money this year" and E is talking about no profit and if we negate also then its weaken the author's claim.
In this question we need to first observe that what option E is telling us
option E says
e) None of Capital Coffee's recently-closed stores had turned a profit in the last two years.
Since in this question we have to find the assumption which bridges the gap between premise( In just the last six months, Capital Coffee has closed over three dozen stores nationwide, and may even need to close more in the future.) and conclusion (Clearly, Capital Coffee is losing money this year).Option E shows the information about which we dont know because its saying from past 2 years they had not turned into profit which is completely out of scope of the argument,the argument does not mentioned anything about it .
For option C which says that
c) Capital Coffee has not opened more than three dozen stores this year.
Now to understand this we need to have clear understanding of what premise is telling and what conclusion is telling.Premise is saying that " Capital Coffee has closed over three dozen stores nationwide, and may even need to close more in the future." where as conclusion is saying "Clearly, Capital Coffee is losing money this year" if we do some prethinking we can assume that since capital coffee is closing more and more branches therefore it is loosing its money which in other words can say that number of stores opened this year were less than the number of stores closed and option C tells us that only
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