It is currently 12 Dec 2017, 21:39

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

In an attempt to draw manufacturing companies from Calonia,

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

3 KUDOS received
Manager
Manager
User avatar
Joined: 13 Apr 2014
Posts: 70

Kudos [?]: 168 [3], given: 196

In an attempt to draw manufacturing companies from Calonia, [#permalink]

Show Tags

New post 08 Sep 2014, 06:10
3
This post received
KUDOS
7
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  45% (medium)

Question Stats:

68% (01:29) correct 32% (01:37) wrong based on 666 sessions

HideShow timer Statistics

In an attempt to draw manufacturing companies from Calonia, a neighboring country, the government of Alusia is instituting a tax credit of $1000 per worker per year for any company that employs more than twenty workers in the manufacturing sector. Because companies are highly responsive to tax credit incentives, the Alusian government expects that most Calonian manufacturing companies will move into Alusia within ten years.

The success of the plan instituted by the government of Alusia relies on the assumption that

A. tax credits are the most popular and effective incentive by which to lure manufacturing companies to a new country.
B. the Calonian government will respond by offering a similar tax credit for manufacturing companies that remain in Calonia.
C. manufacturing companies that have succeeded in Calonia are less likely to succeed if they move operations to a neighboring country.
D. most Calonian manufacturing companies expect to employ at least twenty workers in the manufacturing sector within ten years.
E. Calonian manufacturing companies tend to continue paying each worker, on average, more than $1000 per year.
[Reveal] Spoiler: OA

Last edited by Gnpth on 08 Sep 2014, 09:21, edited 1 time in total.
formatted the topic

Kudos [?]: 168 [3], given: 196

Intern
Intern
avatar
Joined: 15 Apr 2014
Posts: 14

Kudos [?]: 9 [0], given: 117

Concentration: Finance, General Management
GPA: 3.84
Re: In an attempt to draw manufacturing companies from Calonia, [#permalink]

Show Tags

New post 08 Sep 2014, 09:19
Hi all,

Can someone plz explane why the answer is D?

Thanks! :)

Kudos [?]: 9 [0], given: 117

3 KUDOS received
Manager
Manager
User avatar
Joined: 13 Apr 2014
Posts: 70

Kudos [?]: 168 [3], given: 196

Re: In an attempt to draw manufacturing companies from Calonia, [#permalink]

Show Tags

New post 08 Sep 2014, 09:38
3
This post received
KUDOS
krikatkat wrote:
Hi all,

Can someone plz explane why the answer is D?

Thanks! :)


Choice D is correct. On the example above, the negation of the correct answer choice reads. Negation of (D) Most Calonian manufacturing companies do not expect to employ at least twenty workers in the manufacturing sector within ten years. Negating this assumption weakens the argument significantly, by indicating that the tax credit would not apply to the majority of companies that Alusia hopes to lure.

Kudos [?]: 168 [3], given: 196

Board of Directors
User avatar
P
Joined: 17 Jul 2014
Posts: 2697

Kudos [?]: 447 [0], given: 207

Location: United States (IL)
Concentration: Finance, Economics
GMAT 1: 650 Q49 V30
GPA: 3.92
WE: General Management (Transportation)
GMAT ToolKit User Premium Member Reviews Badge
In an attempt to draw manufacturing companies from Calonia, [#permalink]

Show Tags

New post 19 Sep 2014, 13:38
A. tax credits are the most popular and effective incentive by which to lure manufacturing companies to a new country.

but if tax credit is not the most effective incentive, then why would the companies want to move from C to A. what if the costs of moving business, and building new factories are that high, that even tax credit is not a solution.

D. most Calonian manufacturing companies expect to employ at least twenty workers in the manufacturing sector within ten years.
10 years!!!!
what if they need only 10? why would they want to move? maybe in 10 years they will have more than 20, but since then, they have to pay taxes.

Kudos [?]: 447 [0], given: 207

Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 10160

Kudos [?]: 275 [0], given: 0

Premium Member
Re: In an attempt to draw manufacturing companies from Calonia, [#permalink]

Show Tags

New post 10 Oct 2015, 04:34
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

Kudos [?]: 275 [0], given: 0

1 KUDOS received
Board of Directors
User avatar
P
Joined: 17 Jul 2014
Posts: 2697

Kudos [?]: 447 [1], given: 207

Location: United States (IL)
Concentration: Finance, Economics
GMAT 1: 650 Q49 V30
GPA: 3.92
WE: General Management (Transportation)
GMAT ToolKit User Premium Member Reviews Badge
In an attempt to draw manufacturing companies from Calonia, [#permalink]

Show Tags

New post 11 Jan 2016, 18:35
1
This post received
KUDOS
ajaym28 wrote:
In an attempt to draw manufacturing companies from Calonia, a neighboring country, the government of Alusia is instituting a tax credit of $1000 per worker per year for any company that employs more than twenty workers in the manufacturing sector. Because companies are highly responsive to tax credit incentives, the Alusian government expects that most Calonian manufacturing companies will move into Alusia within ten years.


we can come up with few assumptions:
Calonian gvt will not respond with the same tax credits
Tax credits is the only thing that scares manufacturing companies to enter Alusia
Companies that will come to Alusia will actually have more than 20 workers.

The success of the plan instituted by the government of Alusia relies on the assumption that

A. tax credits are the most popular and effective incentive by which to lure manufacturing companies to a new country.
negate this one - conclusion stands, so out. moreover, this one talks about popularity, so incorrect.

B. the Calonian government will respond by offering a similar tax credit for manufacturing companies that remain in Calonia.
this one actually weakens the conclusion.

C. manufacturing companies that have succeeded in Calonia are less likely to succeed if they move operations to a neighboring country.
talks about things not concerned in the argument, so out.

D. most Calonian manufacturing companies expect to employ at least twenty workers in the manufacturing sector within ten years.
ok, so if we negate this one, we see that most of the companies have <20 workers. tax credit in A applies only if companies have >20 workers. thus, there is no need for the companies to move to A, if they have <20 workers, since they will not receive any tax credits. D looks good.

E. Calonian manufacturing companies tend to continue paying each worker, on average, more than $1000 per year.
payment for workers - irrelevant.

So nice to see how I've improved myself 8-)

Kudos [?]: 447 [1], given: 207

Intern
Intern
avatar
B
Joined: 08 Jul 2017
Posts: 18

Kudos [?]: 2 [0], given: 3

Re: In an attempt to draw manufacturing companies from Calonia, [#permalink]

Show Tags

New post 21 Oct 2017, 19:38
Maybe posting a response and my own analysis will help me study, too.

I was a little confused at first but I think I can see why D is the correct answer.

For this question I found the conclusion and worked backwards. The intended result was that companies would move from C to A because companies are very responsive to tax credits. This specific reward of $1000/worker/year would depend on there being 20+ workers in the manufacturing sector.

A. tax credits are the most popular and effective incentive by which to lure manufacturing companies to a new country.
- - This was the trap I fell for. It certainly seems to address the line of reasoning behind country A's government. At the same time, if we negate this and replace the answer with "tax credits are the least popular and least effective incentive by which to lure manufacturing companies into a new country," it doesn't necessarily mean that such a plan couldn't work, just that it's not likely to happen.

B. the Calonian government will respond by offering a similar tax credit for manufacturing companies that remain in Calonia.
- - Well if this were true it's easy to see that the plan from A's government would definitely not happen.

C. manufacturing companies that have succeeded in Calonia are less likely to succeed if they move operations to a neighboring country.
- - Even if it were a bad decision on part of company owners in C, that doesn't mean they won't move to A.

D. most Calonian manufacturing companies expect to employ at least twenty workers in the manufacturing sector within ten years.
- - This is kind of one that I overlooked initially but if we negate it and say that such companies will NOT be employing 20 or more workers within the next 10 years, there would be NO incentive for them to move into country A whatsoever. This one really tripped me up but if it were false, it would most definitely harm the conclusion.

E. Calonian manufacturing companies tend to continue paying each worker, on average, more than $1000 per year.
- - I crossed this one off the list because while it does bring in the figure of $1000 into the picture, cost of employment is out of the scope of the stimulus doesn't even bring in the idea of cost/profits.

Kudos [?]: 2 [0], given: 3

1 KUDOS received
Manager
Manager
User avatar
B
Joined: 12 Dec 2016
Posts: 97

Kudos [?]: 9 [1], given: 44

Re: In an attempt to draw manufacturing companies from Calonia, [#permalink]

Show Tags

New post 08 Nov 2017, 17:58
1
This post received
KUDOS
In an attempt to draw manufacturing companies from Calonia, a neighboring country, the government of Alusia is instituting a tax credit of $1000 per worker per year for any company that employs more than twenty workers in the manufacturing sector. Because companies are highly responsive to tax credit incentives, the Alusian government expects that most Calonian manufacturing companies will move into Alusia within ten years.

The success of the plan instituted by the government of Alusia relies on the assumption that

A. tax credits are the most popular and effective incentive by which to lure manufacturing companies to a new country. it doesn't matter whether tax credits are the most effective or most popular as long as they can get companies to relocate. Not a necessary assumption.
B. the Calonian government will respond by offering a similar tax credit for manufacturing companies that remain in Calonia.this actually weakens the argument: if the Calonian government responded tit-for-tat, then the plan of Alusia would not work
C. manufacturing companies that have succeeded in Calonia are less likely to succeed if they move operations to a neighboring country. Like B, this weakens the argument. No company would want to move, so the tax credits would be ineffective in lurring companies from Calonia
D. most Calonian manufacturing companies expect to employ at least twenty workers in the manufacturing sector within ten years. For a company to receive the tax credit, it must employ at least 20 workers. Companies would only relocate to get the tax credit if they know they would employ at least workers. Keep this one in.
E. Calonian manufacturing companies tend to continue paying each worker, on average, more than $1000 per year. Irrelevant at best. Eliminate

D is the correct answer.

Kudos if you like the response
_________________

Give me kudos and see what happens to your GMAT score :-)

Kudos [?]: 9 [1], given: 44

Re: In an attempt to draw manufacturing companies from Calonia,   [#permalink] 08 Nov 2017, 17:58
Display posts from previous: Sort by

In an attempt to draw manufacturing companies from Calonia,

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.