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Sajjad1994
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Kindly explain the first question.
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Kindly explain the first question.

Statement 1: The expected profits for product A are higher than those for product B in all three years, according to internal financial analysis.

We need to look at and compare second row and fifth row

Second row: Product A (Internal Financial Analysis)

A (Internal Financial Analysis) 60000-50000=10000 80000-70000=10000 100000-80000=20000

Profit for three years= 10000+10000+20000=40000

Second row: Product B A (Internal Financial Analysis)

A (Internal Financial Analysis) 45000-35000=10000 60000-50000=10000 80000-70000=10000

Profit for three years= 10000+10000+10000=30000

Hence 40,000>30,000

Answer: Yes
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Sajjad1994
bubuster171
Kindly explain the first question.

Statement 1: The expected profits for product A are higher than those for product B in all three years, according to internal financial analysis.

We need to look at and compare second row and fifth row

Second row: Product A (Internal Financial Analysis)

A (Internal Financial Analysis) 60000-50000=10000 80000-70000=10000 100000-80000=20000

Profit for three years= 10000+10000+20000=40000

Second row: Product B A (Internal Financial Analysis)

A (Internal Financial Analysis) 45000-35000=10000 60000-50000=10000 80000-70000=10000

Profit for three years= 10000+10000+10000=30000

Hence 40,000>30,000

Answer: Yes

“The expected profits for product A are higher than those for product B in all three years, according to internal financial analysis.”
I thought we would only compare year1, year2, year3 seperately. For example, A's profit in year 1 is 10000 which means the same but not higher than B's profit.
Profits in year 2 are also the same for both.
That means "higher" is not true. WHY we combine?
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cathyjiang04

“The expected profits for product A are higher than those for product B in all three years, according to internal financial analysis.”
I thought we would only compare year1, year2, year3 seperately. For example, A's profit in year 1 is 10000 which means the same but not higher than B's profit.
Profits in year 2 are also the same for both.
That means "higher" is not true. WHY we combine?


If it meant comparing each year separately, it would say “The expected profits for product A are higher than those for product B in each of the three years, according to internal financial analysis.”

The question could be made a bit more clear, and Ill edit it accordingly.
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Statement 2 should be False. B (Internal Analysis) costs for year 1 is equal to B (Industry Experts)
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IanMorgan76
Statement 2 should be False. B (Internal Analysis) costs for year 1 is equal to B (Industry Experts)
The catch here is not to compare the cost among the sources.

All sources' analysis say that they individually think product A is going to cost more than product B.

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­The combined expected profit for product A is higher than that for product B at the end of third year, according to internal financial analysis. => Yes

Product A's profit according to internal financial analysis
  • Year 1: 10k
  • Year 2: 10k
  • Year 3: 20k
  • => total 40k
Product B's profit according to internal financial analysis
  • Year 1: 10k
  • Year 2: 10k
  • Year 3: 10k
  • => total 30K
Product A's accumulated profit > Product B's accumulated profit

According to all three sources, the expected cost of producing product A is higher than that of producing product B in year 1. => Yes

Source Market Research: Cost A (40k) > Cost B (30k)
Source Internal financial analysis: Cost A (50k) > Cost B (35k)
Source Industry Experts: Cost A (35k) > Cost B (20k)

Internal financial analysis predicts a higher profit for product A than for product B in year 2, but market research predicts the opposite. => No

Source Internal financial analysis
  • A's profit: 10k 
  • B's profit: 10k
  • A = B
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