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# Last year company X experienced an unexpected steep drops in

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Director
Joined: 29 Jul 2006
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Last year company X experienced an unexpected steep drops in [#permalink]

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08 Jul 2007, 22:28
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Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.

The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.

Please give reasons for ur choices...

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Senior Manager
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Re: Last year company X experienced an unexpected steep drops in [#permalink]

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29 Jul 2014, 02:57
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vineetgupta wrote:
Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.

The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.

Please give reasons for ur choices...
There are 2 inherent assumptions to Policy Proposal or GOAL/Target(FORMAT: To achieve goal, this policy shall be adhered) questions: 1) Implementation of Policy will achieve the goal. Link 2) Implementation of Policy will not impact other aspects of Goal.

It is the second of the inherent assumptions that gets reflected in Choice C.

To add to this, I feel that loss in stimulus talks about only one year of loss, whereas the conclusion(Last line: "Company X will therefore be able to recoup the losses.") and target is to recoup ie recover for losses of multiple years, and not a single year. A and B will attempt to recoup company only for this year's loss, but will not help in recouping from upcoming losses, if the employees are lost.
_________________

If you know what you're worth, then go out and get what you're worth. But you gotta be willing to take the hits, and not pointing fingers saying you ain't where you wanna be because of anybody! Cowards do that and You're better than that!
The path is long, but self-surrender makes it short; the way is difficult, but perfect trust makes it easy.

Fire the final bullet only when you are constantly hitting the Bull's eye, till then KEEP PRACTICING.
Failure establishes only this, that our determination to succeed was not strong enough.
Getting defeated is just a temporary notion, giving it up is what makes it permanent.

http://gmatclub.com/forum/1000-sc-notes-at-one-place-in-one-document-with-best-of-explanations-192961.html

Press +1 Kudos, if you think my post gave u a tiny tip.

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Manager
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09 Jul 2007, 00:07
I would go for A.

They are talking about recouping losses from profits through cuts in payroll expenditures. Hence A.

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09 Jul 2007, 00:14
I'll go for B. Recoup means 'to get an equivalent of'.

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Director
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09 Jul 2007, 02:31
I will go with C. Although i should say its a brave choice.

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Director
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09 Jul 2007, 06:40
I think it's C.
Company is assuming that cut in resources will not hamper the productivity and hence it will make same profit but with less expenditure.

Regards,
Brajesh

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Senior Manager
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Re: CR - Workforce [#permalink]

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09 Jul 2007, 14:29
vineetgupta wrote:
Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.

The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.

Please give reasons for ur choices...

The passage doesn't talk abt productivity. It talks about making up losses. So, it's between A and B. You can't be certain that the savings will be more than the amount of money lost. But certainly, the savings will be equal to the amount lost in profits. Hence B.
_________________

for every person who doesn't try because he is
afraid of loosing , there is another person who
keeps making mistakes and succeeds..

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Director
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Re: CR - Workforce [#permalink]

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09 Jul 2007, 18:03
shoonya wrote:
vineetgupta wrote:
Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.

The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.

Please give reasons for ur choices...

The passage doesn't talk abt productivity. It talks about making up losses. So, it's between A and B. You can't be certain that the savings will be more than the amount of money lost. But certainly, the savings will be equal to the amount lost in profits. Hence B.

This is exactly the point I had in mind when I picked B but OA is given as C.But C looks out of scope to me...any thoughts??

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09 Jul 2007, 18:13
C? Damn!

I tossed out C on my first skim because of the scope issue.

I would pick A though. It passes the negate test.

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Re: CR - Workforce [#permalink]

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09 Jul 2007, 20:11
vineetgupta wrote:
shoonya wrote:
vineetgupta wrote:
Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.

The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.

Please give reasons for ur choices...

The passage doesn't talk abt productivity. It talks about making up losses. So, it's between A and B. You can't be certain that the savings will be more than the amount of money lost. But certainly, the savings will be equal to the amount lost in profits. Hence B.

This is exactly the point I had in mind when I picked B but OA is given as C.But C looks out of scope to me...any thoughts??

Vineet, what's the source of this question?
_________________

for every person who doesn't try because he is
afraid of loosing , there is another person who
keeps making mistakes and succeeds..

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Director
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Re: CR - Workforce [#permalink]

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09 Jul 2007, 21:01
shoonya wrote:
vineetgupta wrote:
Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.

The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.

Please give reasons for ur choices...

The passage doesn't talk abt productivity. It talks about making up losses. So, it's between A and B. You can't be certain that the savings will be more than the amount of money lost. But certainly, the savings will be equal to the amount lost in profits. Hence B.

i like your reasoning..

B too........

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09 Jul 2007, 21:08
I am with C too.

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30 Aug 2007, 06:52
should be C only because if productivity decreases, again there will be losses after this payrol cut

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30 Aug 2007, 08:29
I Believe C is correct

I initlally picked A but C really makes more sense

if A is fine then B should also be fine ...because here we are not talking about making profits again.... we are just talking about recovering the loses

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31 Aug 2007, 12:39
It's not C
C is out of scope
It is B..
The argument is the decrease in workforce will allow the company to recoup the previous year's loss of 10% profits
Hence, in order for that to occur, B needs to be true or else it WONT recoup the profits

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03 Sep 2007, 15:10
jamesrwrightiii wrote:
It's not C
C is out of scope
It is B..
The argument is the decrease in workforce will allow the company to recoup the previous year's loss of 10% profits
Hence, in order for that to occur, B needs to be true or else it WONT recoup the profits

B can't be right, recoup does not mean that it will be the exact/equal amount... the amount could also exceed the loss... that just doesn't make sense. and that's why both A and B are out

yes, C is a bit far but it is still the only good choice... (as mentioned above)

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03 Sep 2007, 15:10
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# Last year company X experienced an unexpected steep drops in

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