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Measuring the performance of British business in Asia from the late 18

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Joined: 23 Jun 2009
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Measuring the performance of British business in Asia from the late 18 [#permalink]

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Updated on: 14 Nov 2017, 16:47
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Question 1
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59% (01:49) correct 41% (01:33) wrong based on 283

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Question 2
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53% (00:43) correct 47% (00:33) wrong based on 268

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Question 3
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63% (00:54) correct 37% (00:49) wrong based on 265

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Measuring the performance of British business in Asia from the late 1800s to the present is difficult. Profits Offer one measure, but collecting and comparing the profits and dividends (shares of profits distributed to stockholders) of thousands of enterprises present problems of data and interpretation. British overseas banks, for example, all maintained large hidden reserves to which transfers were made before published profits were declared. The actual dividends paid to stockholders were subject to factors such as taxation policy or exchange fluctuations or other factors. For example, the high dividends paid in India by many British managing companies in the early 1920s were more a response to stockholders' demands for short-term profit-taking of earnings the companies had retained from the First World War years—coupled with low rates of dividend taxation in India and a highly favorable currency exchange rate for the Indian rupee against British sterling—than the result of spectacularly successful enterprise during the period 1919 to 1921. Comparisons between different industries in different Asian countries present further difficulties.

Perhaps a more satisfactory measure of business performance is market share. In the late 1800s, British enterprise was dominant in many Asian countries; in Iran as late as the 1920s, the entire modern business sector was under British control. Although it declined at different rates in different countries, by the 1980s British business no longer played such a central role in the market of any Asian country.

1. The author of the passage mentions reserves in British overseas banks most likely in order to

(a) point out that published profits are less useful in measuring business success than are dividends
(b) suggest that many British businesses in Asia were less successful than their published profits indicated
(d) illustrate the difficulties in drawing conclusions about business success or failure from published profits
(e) explain the role played by British overseas banks in British business transactions in the twentieth century

2. The passage suggests which of the following about the high dividends paid in India by many British managing companies
during the early 1920s?

(a) They were made possible by the long-term profits gained by British business in India prior to the 1920s.
(b) They furnish evidence that undermines the accepted view of the results of low dividend-taxation rates on British business in India.
(c) They were unusually high because the exchange rate was more favorable for the rupee against the sterling than at any other time during the twentieth century.
(d) They were commensurate with the dividends paid by British managing companies in other Asian countries during the same period.
(e) They provide a misleading picture of the performance of British business in India from 1919 to 1921.

3. The passage is primarily concerned with

(a) refuting a theory about the performance of British business in Asia
(b) criticizing a widely used method of collecting data about British business in Asia
(c) considering ways to evaluate the success of British business in Asia
(e) presenting an explanation for certain unique features of British business in Asia

Originally posted by felippemed on 17 Jan 2017, 10:05.
Last edited by hazelnut on 14 Nov 2017, 16:47, edited 4 times in total.
Edited by Carcass
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Re: Measuring the performance of British business in Asia from the late 18 [#permalink]

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17 Jan 2017, 10:14
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Re: Measuring the performance of British business in Asia from the late 18 [#permalink]

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Updated on: 19 Oct 2017, 03:26
The options C and D of question 1 are merged into each other. This is leading to confusion. So, I request some moderator to correct the two options as follows :

(d) illustrate the difficulties in drawing conclusions about business success or failure from published profits

carcass

Originally posted by aceGMAT21 on 14 Oct 2017, 06:05.
Last edited by aceGMAT21 on 19 Oct 2017, 03:26, edited 1 time in total.
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Re: Measuring the performance of British business in Asia from the late 18 [#permalink]

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19 Oct 2017, 00:22
Problems with question 1. Someone could enlighten me?
Manager
Status: Aiming MBA!!
Joined: 19 Aug 2017
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Location: India
GMAT 1: 620 Q49 V25
GPA: 3.75
WE: Web Development (Consulting)
Re: Measuring the performance of British business in Asia from the late 18 [#permalink]

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19 Oct 2017, 00:52
3
paolo_giordanello wrote:
Problems with question 1. Someone could enlighten me?

Hi Paolo,

Let me try to help. I have picked the portion of the passage which relates to Question 1.

Measuring the performance of British business in Asia from the late 1800s to the present is difficult. Profits Offer one measure, but collecting and comparing the profits and dividends of thousands of enterprises present problems of data and interpretation. British overseas banks, for example, all maintained large hidden reserves to which transfers were made before published profits were declared.

The author says that collecting and comparing profits of the enterprises that comprised the British business in Asia is one method of measuring the performance of British Business in Asia from the specified time period. However, there is a problem of huge chunks of data and its interpretation. Also, the published profits were not the same as the actual profits, therefore, the data interpretation from the published profits would not be the accurate one. So, this example illustrates the fact that profit is not a successful measure to analyse the performance of the British business in Asia. Also, later in the passage one can double confirm this fact, as the author has mentioned MARKET SHARE as a satisfactory measure.

This is clearly expressed by option D - illustrate the difficulties in drawing conclusions about business success or failure from published profits.

Hope this helps. Let me know, if you have any questions.

Thanks.
-Varun
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Joined: 01 Sep 2010
Posts: 3428
Re: Measuring the performance of British business in Asia from the late 18 [#permalink]

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19 Oct 2017, 03:32
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Thank you to point out the problem in the first question.

Kudo for this and for the good explanation provided.

Fixed the passage.

Regards
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Re: Measuring the performance of British business in Asia from the late 18   [#permalink] 19 Oct 2017, 03:32
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