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05 Jul 2018, 09:26
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D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
67% (01:37) correct
33%
(01:40)
wrong
based on 329
sessions
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Not Attempted Yet
For 2007, Accenzant IT systems posted annual gross revenues that were 220 percent greater than those of five years ago. Despite this rise in revenue, the stock price of Accenzant is only 35 percent of its stock price five years ago.
Which of the following, if true, best accounts for the decline of the company's stock in spite of the increased revenues?
A The company's total operating costs have risen 185 percent over the last five years.
B The company devotes a greater percentage of its revenues to research and development now than it did five years ago.
C The company's top-selling item of five years ago, a database tool, has been surpassed in sales in recent years by the company's revised suite of human resources software
D The software sector in general was highly favored by investors five years ago, and consequently many software companies received a higher stock valuation per dollar of revenue at that time than they do today.
E Five years ago Accenzant was engaged in an aggressive price war with a competitor that is no longer in the business.
Which of the following, if true, best accounts for the decline of the company's stock in spite of the increased revenues?
A The company's total operating costs have risen 185 percent over the last five years.
B The company devotes a greater percentage of its revenues to research and development now than it did five years ago.
C The company's top-selling item of five years ago, a database tool, has been surpassed in sales in recent years by the company's revised suite of human resources software
D The software sector in general was highly favored by investors five years ago, and consequently many software companies received a higher stock valuation per dollar of revenue at that time than they do today.
E Five years ago Accenzant was engaged in an aggressive price war with a competitor that is no longer in the business.
06 Jul 2018, 05:48
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rohan2345
Option A cannot be the answer. Since stock price and selling price are not same increased Cost price has no effect on the decline in the stock price of the company.
Option B,C and E doesn't make sense.
While Option D says that the software company received higher stock valuation per dollar of revenue at that time than they do today, explains the current decline in the stock price.
07 Jul 2018, 22:22
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In paradox type of questions, always look for an answer that addresses both the situations made in the argument.
Option D does that and hence is a correct answer.
Option D does that and hence is a correct answer.
