Suncorp, a new corporation with limited funds, has been

Hi Expert,
There has been given a discussion about a corporation. The corporation carries LIMITED fund.
What is limited fund? IS IT SPECIF? -Nope. It may be $ 50,000, $100,000, $200,000 or, $10,000,000. It actually depends on the company size or some other factors, isn???t it?

Suppose, Limited fund=$200,000
Let (according to correct answer option E),
(Dollar) needs to begin Cattle ranching=$100,000
(Dollar) needs to begin rubber-tapping=$200,000 (since rubber-tapping is twice as high as cattle ranching)

From the argument we've:

Cattle Ranching:
1. Lower profits
2. Destroy forest

Rubber Tapping:
1. Higher Profits
2. Do not destroy forest
Question Stem says: But, they still cattle ranch though rubber-tapping is BETTER.WHY?
Here is my question/reasoning on something:

GMAC says (since E is correct choice):
Since (Dollar) required to begin a rubber-tapping operation is twice as high as the(Dollar) required to begin a cattle ranching, they DO cattle ranch AS THEY DO NOT HAVE ENOUGH MONEY.[i] So what? I can still DO rubber-tapping because the argument and answer option didn't specifically say that IF THE AMOUNT IS $100,000, THEN IT IS LIMITED FUND, BUT IF IT IS MORE THAN or LESS THAN $100,000, THEN IT WON'T BE THE LIMITED FUND! So, I can choose $200,000 as LIMITED fund.
How can I be sure that the cattle ranching groups pursue LESS profit? They still earn MORE profit, because the limited fund doesn't mean that it is JUST $50,000, it may be $200,000, too.--right? If I can earn MORE profit by limited fund ($200,000), which is needed to open a rubber-tapping operation, how/why I make LESS profit? I am still earning MORE profit by this LIMITED fund!
GMAC didn't specifically say that Dollar needs to begin Cattle ranching=$100,000 and $$ needs to begin rubber-tapping=$200,000 (since rubber-tapping is twice as high as cattle ranching) or any SPECIFIC AMOUNT, which indicates that the fund is limited). If the argument DIRECTLY says that LIMITED fund IS $100,000, this CR will still not be okay because we are not informed the cost of cattle ranching or rubber-tapping!

The nitty-gritty: I want to say that I've to know the cost of cattle ranching, rubber-tapping, and the limited fund amount simultaneously. The reasoning of the argument along with correct answer option is fallacious, and thus it does not make any sense! I am not saying that GMAC is wrong; I just want to inform that something is missing in this CR. If something is missing in this CR, then GMAC's thinking is wrong!

Analogy:
This question is totally related with decision-making.
Suppose:
I have an apartment, which consists of two rooms (Room# 1 and Room# 2). Here, this is not my job to invest in the room, which is BETTER; my job is to invest in that room, which is BETTER FOR ME as I am a decision-maker right on the moment.

Both rooms have special features. They are:

Room# 2 (equivalent to rubber-tapping):
1. It costs double than Room# 1, if I want to make it for the tenant to stay.
2. RISK factor: Tenants do not destroy anything in my room (tenants do not destroy anything because they are very good guys !)
3. It makes higher profit,

Room# 1(equivalent to cattle ranching):
1. It costs half of the Room# 2, if I want to make it for tenant to stay.
2. RISK factor: Sometimes, tenants destroy my television, freeze, AC and some other like this (this tenants are wicked guys !)
3. It makes lower profit.

Everyone wants to get high profit by investing on something; I am not regarding of that. The question is trying to give signal that I should choose one in which I can invest whole the money, which is in my pocket, in my bank account, and/or somewhere else (the total amount from these source is limited). To invest in something, at first I have to know the cost/price of that product and the volume of my fund-Is the fund enough or not? Here, I have a LIMITED fund. The fund may be worth $100,000 or $200,000, $600,000. I can't invest in those ROOMS because I still do not know how much those rooms cost. Let, Room#2 costs $200,000 and Room#1 cost $100,000. Now, I'll choose one, which is BETTER FOR ME not just better. I have a LIMITED fund. I do not know how much money in this fund. If the fund carries $200,000, then I must invest in Room# 2 to gain MORE profit. If the fund carries $100,000 then I must invest in Room#1 (here, I have to sacrifice higher profit as I do not have more money to invest in Room#2).---isn't it?
But, I still do not know the volume of the fund and cost of Room# 1 & Room# 2. So, should I take decision to invest in Room# 1 or in Room# 2?----definitely not. So, how does GMAC take decision to invest in Cattle ranching without having enough information?!?
I need to have an exact explanation why E is correct.

If my understanding is wrong, please correct me.
Thanks.

I would suggest you to analyse CR questions in as simple way as possible. The most straight-forward and probably the fastest approach to this problem is as follows:

Cattle ranching continues though rubber tapping is more profitable. Why?

The above is a comparative statement between cattle ranching and ruber tapping, and the correct explanation must state an advantage (or a positive point) of cattle ranching over ruber tapping.
Only option C and E make comparison of these two industries (so eliminate A, B and D), and between C and E, only option E states an advantage of cattle ranching over rubber tapping (eliminate C - it states a disadvantage of cattle ranching). Thus E is the correct answer.

Which of the following, if true, most helps to explain why Suncorp has been pursuing the less profitable of the two economic activities mentioned above?

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands.
The rich soil may be beneficial for creating the grazzing lands but still is less profitable than rubber tapping,this choice is incorrect because it does not address the concern of the author that why is the company still going for cattle grazing rather than rubber tapping.

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates.
The comparison of the location of cattle ranching is irrelevant to the argument since this is internal to the cattle grazing business and does not impact the reason for why doing ranching at all rather than doing rubber tapping.

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry.
the choice is clearly out of scope.

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats.
The information is irrelevant for our argument.

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch.
This choice exactly addresses the reason why the firm is working on cattle ranching rather than rubber tapping as rubber tapping is twice expensive and the firm is low on funds.

Suncorp, a new corporation with limited funds, has been clearing large sections of the tropical Amazon forest for cattle ranching.

This practice continues even though greater profits can be made from rubber tapping, which does not destroy the forest, than from cattle ranching, which does destroy the forest.

We need to look for a reason that justifies why the corporation is pursuing cattle ranching even when there is a better alternative - rubber tapping. Now if one does a bit of pre-thinking, we can come up with reasons like rubber tapping business might not be easy to start - high cost, too many hassles in starting it, not the area of expertise of the corporation etc. Keeping these in mind, let us analyse the options.

Which of the following, if true, most helps to explain why Suncorp has been pursuing the less profitable of the two economic activities mentioned above?

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands.
[Out of Scope: This doesn't tell us why we should go for cattle ranching and not rubber tapping. ]

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates.
[Out of Scope again. We are looking for a comparison between cattle ranching and rubber tapping.]

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry.
[This acts as a weakener, if they are taxed so much, why is the corporation preferring ranching over rubber tapping?]

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats.
[Way out of Scope - not interested in know if the cattle are killed or not]

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch.
[So, we are left with this option - this option seems logical because the corporation has "limited funds" and this could very well be the reason why he cannot start a rubber tapping business.]

Thus, the correct answer is E.

A. Not relevant.
B. So? Not relevant.
C. Weakened the conclusion.
D. Not relevant, yet weakened the conclusion.
E. Relevant. Suncorp acted like a true capitalist.

The key here is in the modifier- a new corporation with limited funds.

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands.

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates.

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry.

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats.

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch.


Link : Rubber tapping is profiter than cattle ranching ----> still Suncorp is following wrenching. Why ?

A. Opposite weakner

B. Weather --Out of scope

C. Any other industry ---Out of scope --- Our scope is limited to RT & CR.

D. Out of scope.

E. Correct ---- "Suncorp, a new corporation with limited funds".

One thing to remember for Profit related questions. Profit always depends on Cost. So choose the option which talks about Profit.
Revenue always depends on sales. So for revenue related questions, choose the option which mentions about sales.
This logic works most of the time.

Suncorp, a new corporation with limited funds, has been clearing large sections of the tropical Amazon forest for cattle ranching. This practice continues even though greater profits can be made from rubber tapping, which does not destroy the forest, than from cattle ranching, which does destroy the forest.

Which of the following, if true, most helps to explain why Suncorp has been pursuing the less profitable of the two economic activities mentioned above?

It is a classic bridge the gap question.

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands. - Provides a fact that does not help answer the question

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates. - Irrelevant Comparison

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry. - Does not bridge the gap but instead increases the gap

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats. Does not bridge the gap but instead increases the gap

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch. Bridges the gap

One thing to pay attention is that the question stem only talks about Suncorp's profits so we can ignore 'destroying forest or not'. Maybe as a company, Suncorp does not care the environment at all (we have no info regarding environment). Therefore, now we our pros and cons reduced to:

Cattle Ranching:
Lower profit

Rubber Tapping:
Higher profit

Now, we only think about money related issue (profit). Suppose that you are the owner of Suncorp and you have to make a decision whether to go for Cattle Ranching or Rubber Tapping. At first you would go for Rubber Tapping because you might think that you would earn more. Also keep in mind: you have limited funds.

Choice E says that:

Cattle Ranching:
Lower profit
Lower cost (initial)

Rubber Tapping:
Higher profit
Higher cost (initial)

Now you have to think about cost (initial). Initial cost for Rubber Tapping is high. Maybe you can't afford it. Actually, maybe you can afford it (if you are brave enough to spend most/all of your limited funds on it if you can). So, would you go for Rubber Tapping or not? Hmm.. Let's think about another alternative: Cattle Ranching. Maybe it is better for the company. You need a good reason to go for Cattle Ranching. Cost (initial) for Cattle Ranching is low.

Now, you have a reason to go for Cattle Ranching. Congratulations, you just found an explanation if someone asks you why you chose Cattle Ranching over Rubber Tapping.

Correct Answer: option (E)

Gist of the passage:
1. Suncorp - new company with limited funds
2. They have been clearing large sections of Amazon rain forest for cattle ranching
3. Even though cattle ranching is not as profitable as rubber tappiing
4. Rubber tapping, unlike cattle ranching does not destroy the forest (additional benefit)

Queston: Logic for why Suncorp has opted for cattle ranching instead of rubber tapping, given that
1. Rubber tapping is more profitable
2. Rubber tapping also does not destroy the forest

Thought Process:
Suncorp has limited funds. This means:
1. They have to prioritise what to invest in. They would probably not be able to invest in both cattle ranching and rubber tapping
2. Whichever activity they invest in should not have such a high setup/installation cost that Suncorp cannot afford it
3. They will probably choose the option that has the least setup cost attached to it

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands.

At best, this tells you why Suncorp chose cattle ranching. But it does not tell us why this is a better choice than rubber tapping.

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates.
Irrelevant to why Suncorp should choose cattle ranching over rubber tapping

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry.
Irrelevant to why Suncorp should choose cattle ranching over rubber tapping

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats.
Irrelevant to why Suncorp should choose cattle ranching over rubber tapping

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch.
Bingo! This matches our thought process. If the money needed to set up and begin a rubber tapping operation is twice as much as the money needed to being a cattle ranch, then Suncorp, which has limited money to spare will opt for cattle ranching over rubber tapping (new company, limited funds, low cost is a priority).

Cheers!

Goal: Resolve the Paradox

Paraphrase: Talks about a corporation, which is more inclined to cattle ranching than Rubber Tapping, even though Rubber tapping provide more profits than ranching. Rubber Tapping doesn't destroy the forests but ranching does.

Paradox in the Q: More Profit but going with an activity which generates less profit. [b]In Simple the monetary benefits from cattle ranching.[/b]

A) This choice doesn't talk about how catlle grazing helps in monetary benefits
b) Talks about different climatic conditions where Ranching is more profitable, but this doesnt address the paradox
c) This choice will weaken the argument but doesn't address the paradox
d) Gives irrelevant info which doesn't help
e) This clearly explains the monetary benefits on why the cooperation is going with ranching than going with rubber tapping

So, E is the Correct Answer.

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands. - does not explain why the less profitable option has been used by the firm. Eliminate (A)


(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates. - the passage does not make the distinction between tropical weather and cold weather. Hence, eliminate (B)

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry. - Irrelevant to the conclusion drawn. Hence, eliminate (C).

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats. - this would weaken the firm's argument (for going ahead with the less profitable plan). But (D) still does not explain why the less profitable plan was chosen. Hence, eliminate (D).

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch. - This tells us that the more profitable option is twice as expensive as the less profitable option. This difference in expense alone is enough to deter the firm from choosing the more profitable option. Hence, (E) is the right answer choice here.

Suncorp, a new corporation with limited funds, has been clearing large sections of the tropical Amazon forest for cattle ranching. This practice continues even though greater profits can be made from rubber tapping, which does not destroy the forest, than from cattle ranching, which does destroy the forest.

Which of the following, if true, most helps to explain why Suncorp has been pursuing the less profitable of the two economic activities mentioned above?

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands. X
-nutrients  profits

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates. X
-wrong comparison, the comparison should be between rubber tapping and cattle ranching

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry. X
-now we are even more perplexed…cattle ranching is less profitable and now we know one of the reasons why

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats. X
-completely irrelevant

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch.
Correct…it’s not completely convincing because arguably over time the profits made from rubber tapping might exceed the initial up front investment…but this is better than all of the other choices

The correct answer - option E


Understanding the passage
- Suncorp is a new company with limited funds
- They have been clearing large sections of Amazon rain forest for cattle ranching
- This is despite the fact that cattle ranching is not as profitable as rubber tapping

Question
Which of the following, if true, most helps to explain why Suncorp has been pursuing the less profitable of the two economic activities mentioned above?

So, we need to find an explanation for the paradoxical action taken by Suncorp.

Prethinking
Remember - Suncorp has limited funds to begin with. This would mean that whatever decision they take (cattle ranching, rubber tapping or both) will be decided on the basis of available funds too (not just which is more profitable)

So, what if rubber tapping requires a significantly high initial investment, which is beyond the funds available with Suncorp? This can explain why Suncorp went for cattle ranching despite the lesser profitability aspect.

Option Choice Analysis

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands.
It does not help resolve the paradox. This only tells us that the soil is good for Cattle ranching (as cattle graze). But it does not explain why Suncorp went for this over rubber tapping

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates.
This option choice is irrelevant to the paradox, which is about Suncorp went for cattle ranching over rubber tapping. This choice tells us cattle ranching in one climate is more profitable than cattle ranching in another climate. But the paradox is - cattle ranching vs. rubber tapping, not cattle ranching between 2 climates.

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry.
This option choice is irrelevant to the paradox, which is about Suncorp went for cattle ranching over rubber tapping. Even if profits made from cattle ranching are significantly so heavily taxed compared to rubber tapping, it would only accentuate the paradox - why still go for cattle ranching, despite lower profits, and higher taxation, as compared to rubber tapping?

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats.
Irrelevant to why Suncorp should choose cattle ranching over rubber tapping. Completely irrelevant

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch.
Along the same lines of the prethinking. Correct. Keeping in mind the limited funds available, this option can explain why a company would still go for cattle ranching. Because the cost of setting up was extremely high. Though this option does not say that the cost of set up is prohibitively high, it is still the best bet to resolve the paradox here. The fact that cost of setup of rubber tapping is double the cost of setup as cattle ranching does provide a reasonable explanation for why any company would not go for rubber tapping.

Hope this helps!

Regards,
Harsha

For option A: Even if the nutrients are good but its overall impact is not countering negetive one , We need something which could bring positive outcome

Type - Resolve the Paradox
Facts -

• Cattle ranching destroys the forest and is less profitable than rubber tapping. 
• SunCorp has limited funds and has chosen cattle ranching. 

---------

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands. This could be true. However, we're not told the soil of Amazon is not good for rubber tapping. It can be assumed that the nutrient rich soil of Amazon can facilitate both grazing and rubber tapping, which all the more adds to the paradox. Drop

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates. The comparison is between cattle ranching and rubber tapping. This doesn't answer the paradox. Drop

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry. All the more reason not to do cattle ranching. Drop

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats. Talks about a possible result of choosing to create grazing fields. Drop

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch. Explains why Suncorp with limited funds chose the option above. Keep­