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Is it cheaper for a business to move freight by truck or rail? Long-ha 26 Mar 2025, 09:48
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4 billion liters are saved when 10% of the load is transferred from truck to railroad. This value is per year. They are asking for if you swapped over 50% from truck to railroad how much would you save in 5 years. In total, if they swapped over 100% in that once year they would have saved 40 billion, if they swapped 50% it would have been 20 billion. Over 5 years, you save 20 billion each year, thus 100 billion total.
sk1007
Another question from the same set

Please let me know if anyone is able to figure out how to solve this question.

Thanks in advance.
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Is it cheaper for a business to move freight by truck or rail? Long-ha 18 Jun 2025, 02:05
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Hi KarishmaB

I have a doubt in part-2 of question-1 on the usage of fuel.

Can't we infer that rail roads use less fuel than trucks? We are given a sentence in the second tab "Railroads are more fuel efficient than trucks. For example, shifting 10 percent of the long-distance freight that currently moves only by truck to rail instead would save 4 billion liters of fuel per year."

I think we would been able to leverage the above sentence if were given an info on distance travelled or other metrics to back-calculate the fuel usage.

KarishmaB

Elite097
KarishmaB Bunuel can you please explain Q1 and Q3?
Tricky Question

Question 1.

For each of the following questions about the freight railroad companies mentioned in the tabs, select Can be determined if it can be answered solely on the basis of the information provided. Otherwise, select Cannot be determined.

1. What percentage of their revenue did freight railroad companies spend to maintain tracks and machinery from 1980 to 2009?­

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

These are two different purposes - maintain (bug fix), improve (additional features).
We know 30% was spent for both together. We do not know how much was spent for "maintain" alone (as asked in the question).


2. On average, do freight railroad companies buy more fuel per year than freight trucking companies do?

Total amount of fuel bought by each per year is not mentioned anywhere.

3. Approximately how much revenue did freight railroad companies take in from 1980 to 2009?

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

$325 million is about 30% of their revenues in this time. So we can find that their revenue was $1083 million (though we do not need to calculate this).


Question 2.

Based on the information provided, which one of the following best approximates the total amount of fuel that would be saved in the next 5 years if half of the long haul freight that currently moves by truck were instead moved by train?

shifting 10 percent of the long-distance freight that currently moves only by truck to rail instead would save 4 billion liters of fuel per year.

Per year, shifting 10% would save 4 billion litres
Shifting 50% would save 4 *5 = 20 billion litres per year.
In next 5 years, we can save 20*5 = 100 billion litres.


Question 3.

For each of the following factors, select Yes if the information provided indicates that, with respect to that factor, shipping freight 1,000 kilometers by rail has an advantage over shipping freight 1,000 kilometers by truck. Otherwise, select No.

1. Fuel efficiency

Given: Railroads are more fuel efficient than trucks.
It is a generic statement for all distances so will hold for 1000 km distance too.
Yes.

2. Total machinery maintenance costs

We have no idea about the cost of maintenance of machinery of trucks at all. So ignore.
No.

3.Transportation cost per unit of freight

Given:
1000 km is a long haul shipment.
The average cost to transport freight by truck is €0.0371 per ton-kilometer for shipments more than 800 kilometers. The aggregated average cost for all rail shipments is approximately €0.0108 per ton-kilometer.
... short-haul shipments are only economical to ship by truck.

This means that average cost for rail for short distances must be higher than that of truck. But since the average for rail is much lower (0.0108) it means that the long distance cost for rail would be even lower than 0.0108.
Hence the data certainly indicates that this cost is lower for rails compared with trucks.

Yes.
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Is it cheaper for a business to move freight by truck or rail? Long-ha 18 Jun 2025, 23:13
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Rails are more fuel efficient but do we know total how much freight they move over what distance? We don't know their yearly consumption of fuel and neither that of the trucking companies. Railways may be more fuel efficient but they may be using far more total fuel because they might be traveling much more distance and carrying many more tonnes of freight i.e. making the journey many more times.

agrasan
Hi KarishmaB

I have a doubt in part-2 of question-1 on the usage of fuel.

Can't we infer that rail roads use less fuel than trucks? We are given a sentence in the second tab "Railroads are more fuel efficient than trucks. For example, shifting 10 percent of the long-distance freight that currently moves only by truck to rail instead would save 4 billion liters of fuel per year."

I think we would been able to leverage the above sentence if were given an info on distance travelled or other metrics to back-calculate the fuel usage.

KarishmaB

Elite097
KarishmaB Bunuel can you please explain Q1 and Q3?
Tricky Question

Question 1.

For each of the following questions about the freight railroad companies mentioned in the tabs, select Can be determined if it can be answered solely on the basis of the information provided. Otherwise, select Cannot be determined.

1. What percentage of their revenue did freight railroad companies spend to maintain tracks and machinery from 1980 to 2009?­

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

These are two different purposes - maintain (bug fix), improve (additional features).
We know 30% was spent for both together. We do not know how much was spent for "maintain" alone (as asked in the question).


2. On average, do freight railroad companies buy more fuel per year than freight trucking companies do?

Total amount of fuel bought by each per year is not mentioned anywhere.

3. Approximately how much revenue did freight railroad companies take in from 1980 to 2009?

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

$325 million is about 30% of their revenues in this time. So we can find that their revenue was $1083 million (though we do not need to calculate this).


Question 2.

Based on the information provided, which one of the following best approximates the total amount of fuel that would be saved in the next 5 years if half of the long haul freight that currently moves by truck were instead moved by train?

shifting 10 percent of the long-distance freight that currently moves only by truck to rail instead would save 4 billion liters of fuel per year.

Per year, shifting 10% would save 4 billion litres
Shifting 50% would save 4 *5 = 20 billion litres per year.
In next 5 years, we can save 20*5 = 100 billion litres.


Question 3.

For each of the following factors, select Yes if the information provided indicates that, with respect to that factor, shipping freight 1,000 kilometers by rail has an advantage over shipping freight 1,000 kilometers by truck. Otherwise, select No.

1. Fuel efficiency

Given: Railroads are more fuel efficient than trucks.
It is a generic statement for all distances so will hold for 1000 km distance too.
Yes.

2. Total machinery maintenance costs

We have no idea about the cost of maintenance of machinery of trucks at all. So ignore.
No.

3.Transportation cost per unit of freight

Given:
1000 km is a long haul shipment.
The average cost to transport freight by truck is €0.0371 per ton-kilometer for shipments more than 800 kilometers. The aggregated average cost for all rail shipments is approximately €0.0108 per ton-kilometer.
... short-haul shipments are only economical to ship by truck.

This means that average cost for rail for short distances must be higher than that of truck. But since the average for rail is much lower (0.0108) it means that the long distance cost for rail would be even lower than 0.0108.
Hence the data certainly indicates that this cost is lower for rails compared with trucks.

Yes.
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Is it cheaper for a business to move freight by truck or rail? Long-ha 19 Jun 2025, 00:29
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Overall Story
The business consultant talks about specific cases of similarities and differences of transportation cost for trucks and rail. There's a single case in which the two costs are similar and you can make a note of it. The important part is precisely note down the differences in multiple cases. For instance, the average cost of transportation by truck is €0.1021 per ton-kilometer when the distance is less than 400 kilometers. Whereas, the same figure decreases to €0.0371 per ton-kilometer when the distance is more than 800 kilometers. For shipments by rail, the average transportation cost is €0.0108 per ton-kilometer (approx.). Way cheaper than transporting by truck, right? When both truck and rail are used for transporting freight, the cost is €0.0129 per ton-kilometer. Make tables neatly summarizing the figures. We have to use those while solving questions! Now, if we go to the "Rail Advocate" tab, we get to know that trucking companies have enjoyed a free ride while freight railroad companies have contributed approx. 30% (approx. $325 billion) from their own revenues to maintain and improve tracks and machinery. So, there should be tax incentives for projects involving freight capacity expansion. Why? Because, benefits to the public would outweigh the cost. How? Railroads are more fuel efficient than trucks - shifting 10% long-distance freight from trucks to rails would save 4 billion liters of fuel per year. Also, railroads help in reducing traffic congestions. The trick is to sift through unnecessary details and focus on the meat of the information.

Solution
Q#1 ID: 100424

Well, if we look at the first statement, it tells you that we CAN determine the percentage of their revenue freight railroad companies spent to maintain tracks and machinery from 1980 to 2009. Really? That's not true! Recall that the 2nd tab tells us these companies have contributed approximately 30%. First reason that this is not true. The second reason is that the companies spent this money to maintain and improve track and machinery. The statement only talks about maintenance, and so, the first statement is not true and Cannot be determined. The second tab mentions that railroads are more fuel efficient than trucks. But it does not provide any information comparing the fuel bought per year by railroad and trucking companies. So, the second statement Cannot be determined. The approximate revenue figures can be found out since approx. 30% of revenues equate to approx. $325 billion. So, the third statement Can be determined.

Q#2 ID: 100422

The second tab informs us that a shift of 10% results in a savings of 4 billion liters of fuel annually. This implies that a shift of 50% (i.e., half of the freight) will results in a savings of 20 billion liters of fuel per year. For five years, the total savings in liters would be 20 x 5 = 100 billion.


Q#3 ID: 100423

Irrespective of the distance traveled, we know that rail has an advantage over truck in shipping freight in terms of fuel efficiency. So, the first response would be Yes. Railroad companies shelled out a substantial portion of revenues in maintenance and improvement of tracks and machinery, whereas the trucking companies paid nothing. This represents an advantage for trucks. So, the second response would be No. For shipping 1 ton of freight over a distance of 1,000 kilometers, the cost for rail and truck computes to €10.8 and €102.1, respectively. So, for this factor, rail has an advantage over truck and the response should be Yes.

If you liked the solution, please give Kudos! :)

Regards,
Shubhadeep Basak
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Is it cheaper for a business to move freight by truck or rail? Long-ha 07 Sep 2025, 00:49
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1st line in the passage it is mentioned that it beyond 800 kms it doesnt matter both trucks & rail is economical. Question 3 asks about advantage of rail over trucks. So, how can we ignore this statement?
KarishmaB
Tricky Question

Question 1.

For each of the following questions about the freight railroad companies mentioned in the tabs, select Can be determined if it can be answered solely on the basis of the information provided. Otherwise, select Cannot be determined.

1. What percentage of their revenue did freight railroad companies spend to maintain tracks and machinery from 1980 to 2009?­

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

These are two different purposes - maintain (bug fix), improve (additional features).
We know 30% was spent for both together. We do not know how much was spent for "maintain" alone (as asked in the question).


2. On average, do freight railroad companies buy more fuel per year than freight trucking companies do?

Total amount of fuel bought by each per year is not mentioned anywhere.

3. Approximately how much revenue did freight railroad companies take in from 1980 to 2009?

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

$325 million is about 30% of their revenues in this time. So we can find that their revenue was $1083 million (though we do not need to calculate this).


Question 2.

Based on the information provided, which one of the following best approximates the total amount of fuel that would be saved in the next 5 years if half of the long haul freight that currently moves by truck were instead moved by train?

shifting 10 percent of the long-distance freight that currently moves only by truck to rail instead would save 4 billion liters of fuel per year.

Per year, shifting 10% would save 4 billion litres
Shifting 50% would save 4 *5 = 20 billion litres per year.
In next 5 years, we can save 20*5 = 100 billion litres.


Question 3.

For each of the following factors, select Yes if the information provided indicates that, with respect to that factor, shipping freight 1,000 kilometers by rail has an advantage over shipping freight 1,000 kilometers by truck. Otherwise, select No.

1. Fuel efficiency

Given: Railroads are more fuel efficient than trucks.
It is a generic statement for all distances so will hold for 1000 km distance too.
Yes.

2. Total machinery maintenance costs

We have no idea about the cost of maintenance of machinery of trucks at all. So ignore.
No.

3.Transportation cost per unit of freight

Given:
1000 km is a long haul shipment.
The average cost to transport freight by truck is €0.0371 per ton-kilometer for shipments more than 800 kilometers. The aggregated average cost for all rail shipments is approximately €0.0108 per ton-kilometer.
... short-haul shipments are only economical to ship by truck.

This means that average cost for rail for short distances must be higher than that of truck. But since the average for rail is much lower (0.0108) it means that the long distance cost for rail would be even lower than 0.0108.
Hence the data certainly indicates that this cost is lower for rails compared with trucks.

Yes.
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Is it cheaper for a business to move freight by truck or rail? Long-ha 12 Nov 2025, 13:24
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Hi, I have a doubt here. If fuel efficiency is mentioned - why cant we extrapolate to say that the same amount of fuel would be purchased to match the fuel efficiency?

KarishmaB
Tricky Question

Question 1.

For each of the following questions about the freight railroad companies mentioned in the tabs, select Can be determined if it can be answered solely on the basis of the information provided. Otherwise, select Cannot be determined.

1. What percentage of their revenue did freight railroad companies spend to maintain tracks and machinery from 1980 to 2009?­

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

These are two different purposes - maintain (bug fix), improve (additional features).
We know 30% was spent for both together. We do not know how much was spent for "maintain" alone (as asked in the question).


2. On average, do freight railroad companies buy more fuel per year than freight trucking companies do?

Total amount of fuel bought by each per year is not mentioned anywhere.

3. Approximately how much revenue did freight railroad companies take in from 1980 to 2009?

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

$325 million is about 30% of their revenues in this time. So we can find that their revenue was $1083 million (though we do not need to calculate this).


Question 2.

Based on the information provided, which one of the following best approximates the total amount of fuel that would be saved in the next 5 years if half of the long haul freight that currently moves by truck were instead moved by train?

shifting 10 percent of the long-distance freight that currently moves only by truck to rail instead would save 4 billion liters of fuel per year.

Per year, shifting 10% would save 4 billion litres
Shifting 50% would save 4 *5 = 20 billion litres per year.
In next 5 years, we can save 20*5 = 100 billion litres.


Question 3.

For each of the following factors, select Yes if the information provided indicates that, with respect to that factor, shipping freight 1,000 kilometers by rail has an advantage over shipping freight 1,000 kilometers by truck. Otherwise, select No.

1. Fuel efficiency

Given: Railroads are more fuel efficient than trucks.
It is a generic statement for all distances so will hold for 1000 km distance too.
Yes.

2. Total machinery maintenance costs

We have no idea about the cost of maintenance of machinery of trucks at all. So ignore.
No.

3.Transportation cost per unit of freight

Given:
1000 km is a long haul shipment.
The average cost to transport freight by truck is €0.0371 per ton-kilometer for shipments more than 800 kilometers. The aggregated average cost for all rail shipments is approximately €0.0108 per ton-kilometer.
... short-haul shipments are only economical to ship by truck.

This means that average cost for rail for short distances must be higher than that of truck. But since the average for rail is much lower (0.0108) it means that the long distance cost for rail would be even lower than 0.0108.
Hence the data certainly indicates that this cost is lower for rails compared with trucks.

Yes.
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Is it cheaper for a business to move freight by truck or rail? Long-ha 13 Nov 2025, 07:18
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Snep
Hi, I have a doubt here. If fuel efficiency is mentioned - why cant we extrapolate to say that the same amount of fuel would be purchased to match the fuel efficiency?


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Fuel efficiency only means rail uses less fuel to move the same freight. It does not mean rail and trucks buy or match the same amount of fuel, so you cannot assume that.
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Is it cheaper for a business to move freight by truck or rail? Long-ha 05 Jan 2026, 21:18
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There is a bit of interpretation required in this question as well, we will have to assume that if 10% corresponds to 4B Litres then 50% would be 20B L per year. Therefore for 5 years and 50% it would be 5*20=100B Litres of fuel.
sk1007
Another question from the same set

Please let me know if anyone is able to figure out how to solve this question.

Thanks in advance.
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Is it cheaper for a business to move freight by truck or rail? Long-ha 18 Jun 2026, 10:23
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For Question3, third statement:

Long-haul shipments of at least 800 kilometers that weigh between 22,500 and 36,000 kilograms are economical to move by either mode.

How do I know whether to take this information at face value or the data given related to the average shipment cost ?


KarishmaB
Tricky Question

Question 1.

For each of the following questions about the freight railroad companies mentioned in the tabs, select Can be determined if it can be answered solely on the basis of the information provided. Otherwise, select Cannot be determined.

1. What percentage of their revenue did freight railroad companies spend to maintain tracks and machinery from 1980 to 2009?­

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

These are two different purposes - maintain (bug fix), improve (additional features).
We know 30% was spent for both together. We do not know how much was spent for "maintain" alone (as asked in the question).


2. On average, do freight railroad companies buy more fuel per year than freight trucking companies do?

Total amount of fuel bought by each per year is not mentioned anywhere.

3. Approximately how much revenue did freight railroad companies take in from 1980 to 2009?

From 1980 to 2009, railroads reinvested approximately $325 billion of their own funds - approximately 30 percent of their total revenue - to maintain and improve their tracks and machinery.

$325 million is about 30% of their revenues in this time. So we can find that their revenue was $1083 million (though we do not need to calculate this).


Question 2.

Based on the information provided, which one of the following best approximates the total amount of fuel that would be saved in the next 5 years if half of the long haul freight that currently moves by truck were instead moved by train?

shifting 10 percent of the long-distance freight that currently moves only by truck to rail instead would save 4 billion liters of fuel per year.

Per year, shifting 10% would save 4 billion litres
Shifting 50% would save 4 *5 = 20 billion litres per year.
In next 5 years, we can save 20*5 = 100 billion litres.


Question 3.

For each of the following factors, select Yes if the information provided indicates that, with respect to that factor, shipping freight 1,000 kilometers by rail has an advantage over shipping freight 1,000 kilometers by truck. Otherwise, select No.

1. Fuel efficiency

Given: Railroads are more fuel efficient than trucks.
It is a generic statement for all distances so will hold for 1000 km distance too.
Yes.

2. Total machinery maintenance costs

We have no idea about the cost of maintenance of machinery of trucks at all. So ignore.
No.

3.Transportation cost per unit of freight

Given:
1000 km is a long haul shipment.
The average cost to transport freight by truck is €0.0371 per ton-kilometer for shipments more than 800 kilometers. The aggregated average cost for all rail shipments is approximately €0.0108 per ton-kilometer.
... short-haul shipments are only economical to ship by truck.

This means that average cost for rail for short distances must be higher than that of truck. But since the average for rail is much lower (0.0108) it means that the long distance cost for rail would be even lower than 0.0108.
Hence the data certainly indicates that this cost is lower for rails compared with trucks.

Yes.
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Is it cheaper for a business to move freight by truck or rail? Long-ha 18 Jun 2026, 22:52
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Hi nbharti,

Great question, and the good news is you don't have to choose between those two pieces of information. They're answering two different questions, so you use both.

Look at where each fact comes from in the Business Consultant tab:

- "Long-haul shipments... are economical to move by either mode." This is a feasibility statement. It tells you that for a 1,000 km shipment, both truck and rail are realistic options. It does not say the two cost the same - it just clears both modes for use.
- The per-ton-kilometer numbers (€0.0371 for truck over 800 km vs. €0.0108 average for rail) are the cost-comparison data. This is what tells you which of the two viable options is cheaper.

Statement (3) asks specifically about a cost advantage. So once the first sentence confirms rail is even on the table for 1,000 km, you turn to the numbers to compare. Rail at €0.0108 is far below truck at €0.0371 - rail has the cost advantage - Yes.

There's no contradiction to resolve: "economical by either mode" means "both are usable," not "both cost the same."

A quick stand-in to feel it

Imagine a tiny note:
- Fact 1: "You can buy this jacket at either Store A or Store B."
- Fact 2: "Store A: €50. Store B: €30."

Fact 1 tells you both stores are options. Fact 2 tells you Store B is cheaper. If someone asks "Does Store B have a price advantage?" you answer with Fact 2 - but you still needed Fact 1 to know B was a real choice. Same move here.

So take both at face value - just use each for the job it's actually doing.

Answer: Yes, No, Yes

nbharti
For Question3, third statement:

Long-haul shipments of at least 800 kilometers that weigh between 22,500 and 36,000 kilograms are economical to move by either mode.

How do I know whether to take this information at face value or the data given related to the average shipment cost ?



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