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# SymPAL has recorded record profits in past three years.

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Senior Manager
Joined: 17 Oct 2016
Posts: 259
Location: India
Concentration: General Management, Healthcare
GMAT 1: 640 Q40 V38
GMAT 2: 680 Q48 V35
GPA: 3.05
WE: Pharmaceuticals (Health Care)
SymPAL has recorded record profits in past three years.  [#permalink]

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28 Dec 2018, 03:49
1
00:00

Difficulty:

55% (hard)

Question Stats:

57% (01:52) correct 43% (01:38) wrong based on 70 sessions

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Industry Analyst:
In the textile industry where not many companies have recorded profits, SymPAL has recorded profits in past three years. This is owing to its practice of investing at-least 50% of their profits back into the research. HexaWay aims to achieve similar profits in next one year, Hence the only logical thing HexaWay must do is invest at-least 50% of its profit in research.
Which of the following, if true, would most undermine the conclusion of the industry analyst that HexaWay will benefit from this approach?

A. SymPal recorded consistent losses for atleast 8years before they became profitable three years back

B. SymPal has an excellent marketing team which has helped in consolidating the market share for past ten years

C. Companies in textile industry need to invest 50% profits in research for a period of two years before they can turn profitable

D. SymPal uses artificial Intelligence in its research, something that HexaWay will not use

E. HexaWay started its textile operations one year back

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Chasing the dragon
Manager
Joined: 29 Nov 2018
Posts: 79
Location: India
GPA: 4
WE: Information Technology (Consulting)
Re: SymPAL has recorded record profits in past three years.  [#permalink]

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28 Dec 2018, 23:59
The Analayst says HexaWay wants to be profitable in ONE year and the ONLY way to achieve it is by investing at least 50% of profits in research.

Option A - SymPal’past losses is irrelevant.
Option B - again a specific trait/advantage of SymPal is irrelevant to HexaWay
Option C - Correct , a general truth. A company at least needs 2 years before turning profitable and HexaWay wants to do in just 1
So it will weaken the conclusion
Option D - author is only concerned about investing profits into research .So using AI is out of scope
Option E - irrelevant
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Hope it helps,

Thanks,
Mofe Bhatia
Re: SymPAL has recorded record profits in past three years.   [#permalink] 28 Dec 2018, 23:59
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