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# Macrotonics Ltd. was established in 1992 and now consists of 3

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Intern
Joined: 12 Nov 2016
Posts: 29
Location: Nepal
Concentration: Accounting, Economics
GPA: 3.63
WE: Account Management (Accounting)
Macrotonics Ltd. was established in 1992 and now consists of 3  [#permalink]

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08 Jun 2017, 22:07
1
6
00:00

Difficulty:

95% (hard)

Question Stats:

33% (02:18) correct 67% (02:07) wrong based on 210 sessions

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Macrotonics Ltd. was established in 1992 and now consists of 3 divisions: Telecoms, Consumables and Infrastructure. After two years of trading, the Telecoms division became the first among three to be profitable and has maintained the highest profit margin. By 1998, Consumables and Infrastructure reached profitability- the latter having its peak in 2015 at 12%. Macrotonics keeps its profitability records annually and are non-cumulative.

Which of the following must be true on the basis of the statements above?

A. None of the divisions of Macrotonics Ltd. were profitable in 1992.

B. The maximum profit margin for Macrotonics is 12%.

C. Infrastructure was more profitable than Consumables in 2015.

D. Telecoms was more profitable than Consumables and Infrastructure in 2014.

E. Consumables was more profitable than Infrastructure in 1998.
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Schools: Rotman '20 (S)
GMAT 1: 700 Q50 V34
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11 Jun 2017, 01:15
3
Good question...
D it is ..
Why A is incorrect...

"Macrotonics Ltd. was established in 1992 and now consists of 3 divisions: Telecoms, Consumables and Infrastructure."

We don't know whether the company had above mentioned division in 1992..,or the division existing at that time was profitable

Why D
"the Telecoms division became the first among three to be profitable and has maintained the highest profit margin."

This shows telecom is all time best in terms of profits

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Macrotonics Ltd. was established in 1992 and now consists of 3  [#permalink]

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11 Jun 2017, 04:59
1
Although i got this question wrong , but after reading between the lines i found the answer to be D
This question is not tough thou but it tests our ability to read carefully .
The reason D is correct is because it has been mentioned in the argument itself.

Macrotonics Ltd. was established in 1992 and now consists of 3 divisions: Telecoms, Consumables and Infrastructure. After two years of trading, the Telecoms division became the first among three to be profitable and has maintained the highest profit margin. By 1998, Consumables and Infrastructure reached profitability- the latter having its peak in 2015 at 12%. Macrotonics keeps its profitability records annually and are non-cumulative.

Hope it helps
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Re: Macrotonics Ltd. was established in 1992 and now consists of 3  [#permalink]

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12 Nov 2017, 23:42
what is the source of this question?
This question seems a good question.
Profit margin is different from profit margin ratio -> D is correct.
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Joined: 02 Jul 2017
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Re: Macrotonics Ltd. was established in 1992 and now consists of 3  [#permalink]

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18 Nov 2017, 04:30
1
Macrotonics Ltd. was established in 1992 and now consists of 3 divisions: Telecoms, Consumables and Infrastructure.
After two years of trading, the Telecoms division became the first among three to be profitable and has maintained the
highest profit margin. By 1998, Consumables and Infrastructure reached profitability- the latter having its peak
in 2015 at 12%. Macrotonics keeps its profitability records annually and are non-cumulative.

Which of the following must be true on the basis of the statements above?

A. None of the divisions of Macrotonics Ltd. were profitable in 1992.
{incorrect, macrotonics was established in 1992 and at that time, we can't know how many division were there out of which
how many were profitable. All we know is that now Macrotonics has 3 divisions.}

B. The maximum profit margin for Macrotonics is 12%.
{incorrect, 12% was peak for consumables, telecoms maintained highest profits}

C. Infrastructure was more profitable than Consumables in 2015.
{incorrect, just consumable was having peak profit of 12%, there is no mention of which one was more profitable}

D. Telecoms was more profitable than Consumables and Infrastructure in 2014.
{correct, as it is clearly written that telecoms has maintained highest profit margin}

E. Consumables was more profitable than Infrastructure in 1998.
{incorrect, in 1998, consumables and infra, both become profitable, but there is no mention of which one was more profitable}
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Joined: 12 Dec 2016
Posts: 1709
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Re: Macrotonics Ltd. was established in 1992 and now consists of 3  [#permalink]

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18 Nov 2017, 13:35
arvind910619 wrote:
Although i got this question wrong , but after reading between the lines i found the answer to be D
This question is not tough thou but it tests our ability to read carefully .
The reason D is correct is because it has been mentioned in the argument itself.

Macrotonics Ltd. was established in 1992 and now consists of 3 divisions: Telecoms, Consumables and Infrastructure. After two years of trading, the Telecoms division became the first among three to be profitable and has maintained the highest profit margin. By 1998, Consumables and Infrastructure reached profitability- the latter having its peak in 2015 at 12%. Macrotonics keeps its profitability records annually and are non-cumulative.

Hope it helps

the problem is that test takers must at least know about the concept of both profit margin and profit margin rate. Otherwise, the question is really confusing.
Re: Macrotonics Ltd. was established in 1992 and now consists of 3 &nbs [#permalink] 18 Nov 2017, 13:35
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