It is currently 20 Feb 2018, 13:41

### 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

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

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Megalimpet is a nationwide owner of office space. They have

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

### Hide Tags

Manager
Status: PLAY HARD OR GO HOME
Joined: 25 Feb 2014
Posts: 173
Location: India
Concentration: General Management, Finance
Schools: Mannheim
GMAT 1: 560 Q46 V22
GPA: 3.1
Megalimpet is a nationwide owner of office space. They have [#permalink]

### Show Tags

02 Jul 2014, 01:27
8
KUDOS
4
This post was
BOOKMARKED
00:00

Difficulty:

25% (medium)

Question Stats:

79% (01:47) correct 21% (02:06) wrong based on 266 sessions

### HideShow timer Statistics

Megalimpet is a nationwide owner of office space. They have major office buildings in the downtowns of several cities in the 48 lower states, and rent this space to individual companies. Megalimpet office spaces vary from small office to large suites, and every space has custom-designed wall-to-wall carpeting. The carpet in several Megalimpet facilities needed replacing. The winning bid for the nationwide carpet replacement was submitted by Bathyderm Carpet Company (BCC). The bid contract involves all delivery costs, all installation, and any ongoing maintenance and upkeep while the carpet is under the three-year warranty. Both BCC executives and independent consultants they hired felt BCC would be able to perform all these services for far less than their bid price; these circumstances would allow BCC to reap a considerable profit.

Which of the following, if true, most calls in question the argument that BCC will make a large profit from this contract with Megalimpet?

A.)All the carpets will have to be transported by train from BCC factory in Louisville, KY, to Megalimpet’s locations from coast to coast.

B.)BCC has already supplied carpets to a number of restaurant chains, and some of those spaces are as large as Megalimpet’s largest office spaces.

C.)The carpet installation teams will have to cut different sizes of the carpets for the different size office suites in the Megalimpet buildings.

D.)The material in BCC carpets degrades rapidly when it comes into contact with standard toner, found in most laser printers and photocopiers; the degraded sections are unsightly and smell bad, so they often need to be replaced.

E.)The next competing bid after BCC’s was 50% higher than BCC’s bid

ALL THE BEST GUYS..HOPE EVRYONE GETS IT RIGHT..!! ...IN DEEP NEED OF KUDOS BTW
[Reveal] Spoiler: OA

_________________

ITS NOT OVER , UNTIL I WIN ! I CAN, AND I WILL .PERIOD.

Senior Manager
Joined: 28 Apr 2014
Posts: 269
Re: Megalimpet is a nationwide owner of office space. They have [#permalink]

### Show Tags

02 Jul 2014, 21:47
1
KUDOS
D IMO.

Out of the various options given , only D seems to relate why this "particular contract" might not be as fruitful for BCC as envisaged by their executives and consultants. The factors mentioned in this point are typical of this contract i.e. for office setting. But I must admit the chain of reasoning is a bit shaky.

For eg if we take C , it is possible that all other contracts provide carpets to establishments with standard size but this will require extensive customization ( thus increased costs)

Similarly A denotes that it is possible that due to increased transportation costs , they might not be able to make profits.

But all said and done , only D indicates with certainty that wear and tear and thus cost will be higher.
Veritas Prep GMAT Instructor
Joined: 16 Oct 2010
Posts: 7942
Location: Pune, India
Re: Megalimpet is a nationwide owner of office space. They have [#permalink]

### Show Tags

02 Jul 2014, 22:21
1
KUDOS
Expert's post
vards wrote:
Megalimpet is a nationwide owner of office space. They have major office buildings in the downtowns of several cities in the 48 lower states, and rent this space to individual companies. Megalimpet office spaces vary from small office to large suites, and every space has custom-designed wall-to-wall carpeting. The carpet in several Megalimpet facilities needed replacing. The winning bid for the nationwide carpet replacement was submitted by Bathyderm Carpet Company (BCC). The bid contract involves all delivery costs, all installation, and any ongoing maintenance and upkeep while the carpet is under the three-year warranty. Both BCC executives and independent consultants they hired felt BCC would be able to perform all these services for far less than their bid price; these circumstances would allow BCC to reap a considerable profit.

Which of the following, if true, most calls in question the argument that BCC will make a large profit from this contract with Megalimpet?

A.)All the carpets will have to be transported by train from BCC factory in Louisville, KY, to Megalimpet’s locations from coast to coast.

B.)BCC has already supplied carpets to a number of restaurant chains, and some of those spaces are as large as Megalimpet’s largest office spaces.

C.)The carpet installation teams will have to cut different sizes of the carpets for the different size office suites in the Megalimpet buildings.

D.)The material in BCC carpets degrades rapidly when it comes into contact with standard toner, found in most laser printers and photocopiers; the degraded sections are unsightly and smell bad, so they often need to be replaced.

E.)The next competing bid after BCC’s was 50% higher than BCC’s bid

ALL THE BEST GUYS..HOPE EVRYONE GETS IT RIGHT..!! ...IN DEEP NEED OF KUDOS BTW

The plan is to earn a large profit. BCC executives and independent consultants feel that they will be able to earn the large profit. They would have obviously found out the amount of work to be done and the costs related to that work. For the plan to fail, we are looking for some exceptional reason that the executives and consultants may not have considered in calculating costs.

Options (A) and (C) would have already been considered while calculating costs.

Option (D) could be unexpected. If the carpet degrades and needs to be replaced often, it will make the costs shoot up. Hence the plan could fail.

_________________

Karishma
Veritas Prep | GMAT Instructor
My Blog

Get started with Veritas Prep GMAT On Demand for \$199

Veritas Prep Reviews

Intern
Joined: 26 May 2014
Posts: 20
Concentration: Marketing, Finance
WE: Design (Manufacturing)
Megalimpet is a nationwide owner of office space. They have major off [#permalink]

### Show Tags

04 Sep 2014, 17:51
3
KUDOS
1
This post was
BOOKMARKED
Megalimpet is a nationwide owner of office space. They have major office buildings in the downtowns of several cities in the 48 lower states, and rent this space to individual companies. Megalimpet office spaces vary from small office to large suites, and every space has custom-designed wall-to-wall carpeting. The carpet in several Megalimpet facilities needed replacing. The winning bid for the nationwide carpet replacement was submitted by Bathyderm Carpet Company (BCC). The bid contract involves all delivery costs, all installation, and any ongoing maintenance and upkeep while the carpet is under the three-year warranty. Both BCC executives and independent consultants they hired felt BCC would be able to perform all these services for far less than their bid price; these circumstances would allow BCC to reap a considerable profit.

Which of the following, if true, most calls in question the argument that BCC will make a large profit from this contract with Megalimpet?

A) All the carpets will have to be transported by train from BCC factory in Louisville, KY, to Megalimpet’s locations from coast to coast.

B) BCC has already supplied carpets to a number of restaurant chains, and some of those spaces are as large as Megalimpet’s largest office spaces.

C) The carpet installation teams will have to cut different sizes of the carpets for the different size office suites in the Megalimpet buildings.

D)The material in BCC carpets degrades rapidly when it comes into contact with standard toner, found in most laser printers and photocopiers; the degraded sections are unsightly and smell bad, so they often need to be replaced.

E)The next competing bid after BCC’s was 50% higher than BCC’s bid

kUDOS IF U LIKE EM
Manager
Joined: 21 Jul 2014
Posts: 127
Re: Megalimpet is a nationwide owner of office space. They have major off [#permalink]

### Show Tags

04 Sep 2014, 18:08
2
KUDOS
simi200207 wrote:
Megalimpet is a nationwide owner of office space. They have major office buildings in the downtowns of several cities in the 48 lower states, and rent this space to individual companies. Megalimpet office spaces vary from small office to large suites, and every space has custom-designed wall-to-wall carpeting. The carpet in several Megalimpet facilities needed replacing. The winning bid for the nationwide carpet replacement was submitted by Bathyderm Carpet Company (BCC). The bid contract involves all delivery costs, all installation, and any ongoing maintenance and upkeep while the carpet is under the three-year warranty. Both BCC executives and independent consultants they hired felt BCC would be able to perform all these services for far less than their bid price; these circumstances would allow BCC to reap a considerable profit.

Which of the following, if true, most calls in question the argument that BCC will make a large profit from this contract with Megalimpet?

A) All the carpets will have to be transported by train from BCC factory in Louisville, KY, to Megalimpet’s locations from coast to coast.

B) BCC has already supplied carpets to a number of restaurant chains, and some of those spaces are as large as Megalimpet’s largest office spaces.

C) The carpet installation teams will have to cut different sizes of the carpets for the different size office suites in the Megalimpet buildings.

D)The material in BCC carpets degrades rapidly when it comes into contact with standard toner, found in most laser printers and photocopiers; the degraded sections are unsightly and smell bad, so they often need to be replaced.

E)The next competing bid after BCC’s was 50% higher than BCC’s bid

kUDOS IF U LIKE EM

Hi simi200207,

Here's how I approached the question:

First I read the question stem: "Which of the following, if true, most calls in question the argument that BCC will make a large profit from this contract with Megalimpet?"

I see that the question is asking about profitability of BCC. Then I looked at the passage.

The first few sentences describe Megalimpet. Not the company we are considering here. We care about their vendor - BCC.

BCC placed their bid and claimed it was profitable based on "all delivery costs, all installation, and any ongoing maintenance and upkeep while the carpet is under the three-year warranty."

So now I go to the answer choices and use a process of elimination.

a) The passage says they already took into consideration "all delivery costs." Therefore they must have already known about this expense and still believed that the bid would be profitable.
b) Having supplied carpets to restaurants in the past does not mean that the bid would be any less profitable. If anything, it would strengthen the executives' conclusion because they are backed by experience.
c) The passage says they already took into consideration "all installation." Therefore they must have already known about this expense and still believed that the bid would be profitable.
d) This answer choice provides us with a NEW variable. It is possible that the executives and consultants had not previously done work for office spaces and therefore have not considered the impact of toner on maintenance costs. I keep this one and make sure there isn't a better option available.
e) This one is irrelevant. Some other company's bid does not impact BCC's profitability. Profitability is only impacted by revenue and expenses.

Correct answer D because all others are eliminated.
Intern
Joined: 24 Mar 2014
Posts: 21
Re: Megalimpet is a nationwide owner of office space. They have major off [#permalink]

### Show Tags

04 Sep 2014, 18:37
1
KUDOS
simi200207 wrote:
Megalimpet is a nationwide owner of office space. They have major office buildings in the downtowns of several cities in the 48 lower states, and rent this space to individual companies. Megalimpet office spaces vary from small office to large suites, and every space has custom-designed wall-to-wall carpeting. The carpet in several Megalimpet facilities needed replacing. The winning bid for the nationwide carpet replacement was submitted by Bathyderm Carpet Company (BCC). The bid contract involves all delivery costs, all installation, and any ongoing maintenance and upkeep while the carpet is under the three-year warranty. Both BCC executives and independent consultants they hired felt BCC would be able to perform all these services for far less than their bid price; these circumstances would allow BCC to reap a considerable profit.

Which of the following, if true, most calls in question the argument that BCC will make a large profit from this contract with Megalimpet?

A) All the carpets will have to be transported by train from BCC factory in Louisville, KY, to Megalimpet’s locations from coast to coast.

B) BCC has already supplied carpets to a number of restaurant chains, and some of those spaces are as large as Megalimpet’s largest office spaces.

C) The carpet installation teams will have to cut different sizes of the carpets for the different size office suites in the Megalimpet buildings.

D)The material in BCC carpets degrades rapidly when it comes into contact with standard toner, found in most laser printers and photocopiers; the degraded sections are unsightly and smell bad, so they often need to be replaced.

E)The next competing bid after BCC’s was 50% higher than BCC’s bid

kUDOS IF U LIKE EM

Hi,

This seemed to be pretty straight forward. We have to find something that would harm BCC and cause losses.
Clear answer would contain something that would increase the costs beared by BCC in the installation of carpets.
If BCC has to replace sections due to degradation that would be a burden on BCC and hence would rip off their profits.
Clear D .

Gettinh Kudos might help
Cheers
Non-Human User
Joined: 01 Oct 2013
Posts: 10324
Re: Megalimpet is a nationwide owner of office space. They have major off [#permalink]

### Show Tags

02 Mar 2016, 02:25
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.
Non-Human User
Joined: 01 Oct 2013
Posts: 10324
Re: Megalimpet is a nationwide owner of office space. They have [#permalink]

### Show Tags

19 Feb 2017, 12:12
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.
Verbal Forum Moderator
Joined: 13 Feb 2015
Posts: 881
Re: Megalimpet is a nationwide owner of office space. They have [#permalink]

### Show Tags

15 Aug 2017, 21:37
Merged topics. Please, search before posting questions!
_________________

Re: Megalimpet is a nationwide owner of office space. They have   [#permalink] 15 Aug 2017, 21:37
Display posts from previous: Sort by

# Megalimpet is a nationwide owner of office space. They have

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

 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®.