GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 18 Oct 2018, 15:24

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

Malco, a prominent electronics manufacturer and distributor, has see

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

Hide Tags

Intern
Intern
avatar
Joined: 08 Nov 2009
Posts: 30
Location: United States (AK)
Concentration: Marketing, Entrepreneurship
GMAT 1: 720 Q49 V39
GPA: 3.4
WE: Engineering (Health Care)
Malco, a prominent electronics manufacturer and distributor, has see  [#permalink]

Show Tags

New post Updated on: 24 Sep 2018, 05:22
5
7
00:00
A
B
C
D
E

Difficulty:

  95% (hard)

Question Stats:

46% (02:08) correct 54% (02:28) wrong based on 354 sessions

HideShow timer Statistics

Malco, a prominent electronics manufacturer and distributor, has seen an after­‐tax revenues grow in proportion to increased expenditures on warehouse security over the last decade. However, because Malco’s losses due to theft at its warehouses remain higher than the industry average, the management decides to continue to increase its spending
on warehouse security in order to ensure that its revenues continue to increase.

Which of the following indicates a logical flaw in Malco’s plan?


A. The decrease in Malco’s losses due to theft over the last decade may be smaller than Malco’s current overall losses due to theft.

B. The industry average for losses due to theft in the electronics distribution field may be low compared to that of other fields.

C. Malco might have been able to achieve an equal increase in revenues over the last decade by increasing its expenditure on international marketing instead of warehouse security.

D. The expenditures on warehouse security to date may have been sufficient to stop the majority of warehouse thefts.

E. Over the last decade, Malco’s spending on warehouse security has increased in proportion to its spending in several other areas, such as advertising and research and development.


Source: Knewton

Hi guys - I am struggling with a CR from Knewton class. Can you please help me understand the OA?

Originally posted by eladshus on 25 Dec 2010, 09:02.
Last edited by Bunuel on 24 Sep 2018, 05:22, edited 3 times in total.
Renamed the topic and edited the question.
Manager
Manager
avatar
Status: swimming against the current
Joined: 24 Jul 2009
Posts: 195
Location: Chennai, India
Re: Malco, a prominent electronics manufacturer and distributor, has see  [#permalink]

Show Tags

New post 25 Dec 2010, 23:56
1
eladshus wrote:
Hi guys - I am struggling with a CR from Knewton class. Can you please help me understand the OA?

Malco, a prominent electronics manufacturer and distributor, has seen an after­‐tax revenues grow in proportion to
increased expenditures on warehouse security over the last decade. However, because Malco’s losses due to theft
at its warehouses remain higher than the industry average, the management decides to continue to increase its spending
on warehouse security in order to ensure that its revenues continue to increase.

Which of the following indicates a logical flaw in Malco’s plan?

1. The decrease in Malco’s losses due to theft over the last decade may be smaller than Malco’s current overall losses due
to theft.
2. The industry average for losses due to theft in the electronics distribution field may be low compared to that of other fields.
3. Malco might have been able to achieve an equal increase in revenues over the last decade by increasing its expenditure on
international marketing instead of warehouse security.
4. The expenditures on warehouse security to date may have been sufficient to stop the majority of warehouse thefts.
5. Over the last decade, Malco’s spending on warehouse security has increased in proportion to its spending in several other
areas, such as advertising and research and development.


The first 3 are irrelevant.

4. Ok but, what if even the minority thefts too are eliminated. Revenue will increase
5. This shows revenue increase could have been due to spending on promotions. So further spending on security might not yield the intended effects.
_________________

Gonna make it this time

Manager
Manager
avatar
Joined: 04 Jun 2010
Posts: 104
Concentration: General Management, Technology
Schools: Chicago (Booth) - Class of 2013
GMAT 1: 670 Q47 V35
GMAT 2: 730 Q49 V41
Re: Malco, a prominent electronics manufacturer and distributor, has see  [#permalink]

Show Tags

New post 26 Dec 2010, 13:02
1
eladshus wrote:
Hi guys - I am struggling with a CR from Knewton class. Can you please help me understand the OA?

Malco, a prominent electronics manufacturer and distributor, has seen an after­‐tax revenues grow in proportion to
increased expenditures on warehouse security over the last decade. However, because Malco’s losses due to theft
at its warehouses remain higher than the industry average, the management decides to continue to increase its spending
on warehouse security in order to ensure that its revenues continue to increase.

Which of the following indicates a logical flaw in Malco’s plan?

1. The decrease in Malco’s losses due to theft over the last decade may be smaller than Malco’s current overall losses due
to theft. Irrelevant to the plan, the plan only compares the industry average and Malco's losses , in no where there is comparison to his past losses. Also notice the may, they may be smaller but they also may be higher
2. The industry average for losses due to theft in the electronics distribution field may be low compared to that of other fields.
Irrelevant too, there is no comparison between fields of losses
3. Malco might have been able to achieve an equal increase in revenues over the last decade by increasing its expenditure on
international marketing instead of warehouse security. Malco might have been able but he also might not
4. The expenditures on warehouse security to date may have been sufficient to stop the majority of warehouse thefts.
again may have been sufficient, but maybe they are not
5. Over the last decade, Malco’s spending on warehouse security has increased in proportion to its spending in several other
areas, such as advertising and research and development. This is a great alternative explanation to why his revenues kept growing, not only because of security but also because of advertising and R&D so this is a flaw in his plan. The increased revenue could be coming from more than just the security

_________________

Consider Kudos if my post helped you. Thanks!
--------------------------------------------------------------------
My TOEFL Debrief: http://gmatclub.com/forum/my-toefl-experience-99884.html
My GMAT Debrief: http://gmatclub.com/forum/670-730-10-luck-20-skill-15-concentrated-power-of-will-104473.html

Retired Moderator
avatar
Joined: 03 Aug 2010
Posts: 210
Re: Malco, a prominent electronics manufacturer and distributor, has see  [#permalink]

Show Tags

New post 28 Dec 2010, 06:26
1
1
You can consider this as a cause and effect question.

As per the thinking of the arguement

cause - higher security spending
effect - higher revenues

Now , effect higher revenue can be a result of another cause other than high security also,, which is well explained by E
_________________

http://www.gmatpill.com/gmat-practice-test/

Amazing Platform

Intern
Intern
User avatar
B
Joined: 21 Jul 2015
Posts: 13
Reviews Badge
Re: Malco, a prominent electronics manufacturer and distributor, has see  [#permalink]

Show Tags

New post 01 Jun 2017, 02:05
E is appropriate. Because the increase in revenue is not only from the increase in warehouse expenditure.

Sent from my XT1585 using GMAT Club Forum mobile app
_________________

NOW OR NEVER

Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 3214
Premium Member
Re: Malco, a prominent electronics manufacturer and distributor, has see  [#permalink]

Show Tags

New post 24 Sep 2018, 02:30
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.
_________________

-
April 2018: New Forum dedicated to Verbal Strategies, Guides, and Resources

GMAT Club Bot
Re: Malco, a prominent electronics manufacturer and distributor, has see &nbs [#permalink] 24 Sep 2018, 02:30
Display posts from previous: Sort by

Malco, a prominent electronics manufacturer and distributor, has see

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


Copyright

GMAT Club MBA Forum Home| About| Terms and Conditions and Privacy Policy| 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®.