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For 2007, Accenzant IT systems posted annual gross revenues that were

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For 2007, Accenzant IT systems posted annual gross revenues that were  [#permalink]

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New post 05 Jul 2018, 09:26
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Question Stats:

70% (01:38) correct 30% (01:30) wrong based on 103 sessions

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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.

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Re: For 2007, Accenzant IT systems posted annual gross revenues that were  [#permalink]

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New post 06 Jul 2018, 05:48
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rohan2345 wrote:
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.


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.
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Re: For 2007, Accenzant IT systems posted annual gross revenues that were  [#permalink]

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New post 07 Jul 2018, 22:22
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.
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Re: For 2007, Accenzant IT systems posted annual gross revenues that were  [#permalink]

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New post 08 Jul 2018, 20:14
Typical example to be solved with this pattern

1. Understand logic and conclusion
2. A. if question is open ended - strengthen the above passage or B. the question is saying strengthen a specific part of passage by providing conclusion in the question stem ?
3.If B type - then Pre-think would only require thinking option which can strengthen Logic. If A type - we need 2 prethink options one for logic and one for conclusion
4. Rule out option by glance and here you go.

Here - we know the passage is asking us to strengthen specific conclusion - logic strengthening B type - so something happened that reduced the stock price.

D option answer
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Re: For 2007, Accenzant IT systems posted annual gross revenues that were &nbs [#permalink] 08 Jul 2018, 20:14
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For 2007, Accenzant IT systems posted annual gross revenues that were

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