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The year-end sales report from a veterinary vaccine company states the following:
A regulation significantly curbing the use of mink furs to manufacture garments was passed during the middle of this year. However, compared to last year, there was no change in the revenues from the sales of the vaccine Minkvac that is mandatory to be administered to all the minks that are used to manufacture garments.
Because of the above report, the managers of the vaccine company did not reduce the projected revenues from Minkvac for the next year, a value that was estimated last year.
Which of the following options, if true, indicates most strongly that the projection made by the managers for the next year mentioned in the passage would most likely not be met?
A. A new vaccine, Catvac, developed by the company would bring in significant revenues next year.
B. Development of the company’s another vaccine called Racoonvac was hindered because of safety concerns and will not be marketed next year as previously planned.
C. The latest clinical trial results for Minkvac have proven that the effectiveness of the vaccine is only 80% as compared to 90% previously thought to be.
D. Minkvac is a vaccine against a seasonal disease that spreads in the second quarter of the year and hence almost all the vaccines are sold in the first quarter.
E. Even though some high-performing sales managers responsible for Minkvac sales left the company last year, the revenues from Minkvac this year are not affected.
What do we have here?> The usage of Mink Fur to manufacture garments was banned, but even after the ban, the sale of vaccine, administered to those minks used for obtaining Mink Fur for manufacture of garments, did not plummet.
> The company's projected revenue for next year was estimated last year
> the company didn't change its revenue projections for next year
What do we need to do?We need to weaken the company's confidence in its revenue projections for the next year that were estimated last year.
How do we do that?We need to find something that has changed and that can affect the sales of the vaccine, thereby affecting the revenue from the vaccine.
Let's move to option analysis:
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A. A new vaccine, Catvac, developed by the company would bring in significant revenues next year.
Good for Catvac. But we don't know what effect will this have on Minkvac, and frankly, we're only concerned about Minkvac here.
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B. Development of the company’s another vaccine called Racoonvac was hindered because of safety concerns and will not be marketed next year as previously planned.
Same as A. This affects the overall revenue of the company, but we're concerned about revenue from Minkvac only
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C. The latest clinical trial results for Minkvac have proven that the effectiveness of the vaccine is only 80% as compared to 90% previously thought to be.
Well, this can be something that impacts the sales of Minkvac. If the effectiveness isn't great, the consumers might switch to other vaccines which have higher efficacy. Let's hold on to this for now.
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D. Minkvac is a vaccine against a seasonal disease that spreads in the second quarter of the year and hence almost all the vaccines are sold in the first quarter.
But this is something that would've been known while making the estimates last year, right? It's not new information.
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E. Even though some high-performing sales managers responsible for Minkvac sales left the company last year, the revenues from Minkvac this year are not affected.
The sales managers left last year. If the current year's sales weren't affected by this, why will the next year's projections be affected?
Hence,
the best option out of the given ones is option C. That's the answer, imo.