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Tanco, a leather manufacturer, uses large quantities of common salt to

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Tanco, a leather manufacturer, uses large quantities of common salt to  [#permalink]

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Tanco, a leather manufacturer, uses large quantities of common salt to preserve animal hides. New environmental regulations have significantly increased the cost of disposing of salt water that results from this use, and, in consequence, Tanco is considering a plan to use potassium chloride in place of common salt. Research has shown that Tanco could reprocess the by-product of potassium chloride use to yield a crop fertilizer, leaving a relatively small volume of waste for disposal.

In determining the impact on company profits of using potassium chloride in place of common salt, it would be important for Tanco to research all of the following EXCEPT:


(A) What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides?

(B) To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride?

(C) What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?

(D) How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?

(E) Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so?


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Originally posted by freetheking on 14 Jul 2006, 17:54.
Last edited by Bunuel on 02 Nov 2018, 00:56, edited 5 times in total.
Renamed the topic and edited the question.
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Re: QOTD: Tanco, a leather manufacturer, uses large quantities  [#permalink]

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New post 07 Mar 2018, 09:39
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Tanco is considering a plan to use potassium chloride in place of common salt. The answer choices consist of questions that may or may not be important to research in determining the impact of that plan on Tanco's profits. Before diving into the answer choices, let's make sure we understand the plan and the rationale behind it:

  • Tanco uses large quantities of common salt to preserve animal hides.
  • New environmental regulations have significantly increased the cost of disposing of salt water that results from preserving animal hides with salt. So if Tanco does not change their processes, their costs will increase significantly.
  • In order to avoid these increased costs, Tanco is considering a plan to use potassium chloride in place of common salt. That way Tanco will avoid the costs of disposing of salt water.
  • But what about the disposal of the waste from potassium chloride use? Well, research has shown that Tanco could reprocess the by-product (i.e. waste product) of potassium chloride use to yield a crop fertilizer.
  • Recycling the by-product to make crop fertilizer will leave only a relatively small volume of waste for disposal.

Sounds great! Instead of paying the increased costs of salt water disposal, Tanco can switch to potassium chloride and recycle most of the by-products. In that case, Tanco will only have to dispose of a relatively small quantity of waste.

But will implementing this plan affect company profits? Any answer choice that addresses a possible impact to Tanco's profits should be eliminated.

Quote:
A. What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides?

We know that Tanco's plan will allow the company to avoid the increased costs of salt water disposal. But will this plan increase costs in other ways? What if the amount of potassium chloride needed to preserve some quantity of hides costs much more than the amount of common salt needed to preserve the same quantity of hides?

Sure, Tanco will save on disposal costs, but the company will have to spend more on potassium chloride than it spent on common salt. If that cost increase is large enough, then the plan to switch to potassium chloride could actually have a negative effect on profits. Tanco would certainly want to research these amounts in determining the impact of the plan on company profits, so eliminate (A).

Quote:
B. To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride?

If some or all of the equipment involved when using common salt is NOT suitable when using potassium chloride, then Tanco may have to upgrade or replace that equipment. If these equipment changes are small, they may not be very costly. But Tanco might have to invest a substantial amount of money in equipment modifications before switching to potassium chloride. Depending on the amounts, this could significantly affect Tanco's profits.

In determine the impact of the plan on company profits, Tanco would want to research equipment compatibility. Eliminate (B).

Quote:
C. What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?

Even if the potassium chloride by-products are reprocessed to yield a crop fertilizer, Tanco will have to dispose of a relatively small quantity of waste. The quantity of waste may be small, but how expensive is it to dispose of that waste? What if the environmental regulations on this waste make its disposal significantly expensive? How would those disposal costs compare to the increased salt water disposal costs?

Depending on the exact amounts, disposal of the small quantity of potassium chloride waste might be more expensive than the disposal of salt water, even after the new regulations are implemented. Tanco would certainly want to determine whether the company will face other regulations if the plan is implemented. This question would be important to research in determining the effect of the plan on Tanco's profits. Eliminate (C).

Quote:
D. How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?

Even if using potassium chloride is the cheaper option, will it affect the characteristics of the leather? What if using potassium chloride results in leather that is significantly different than the leather produced using common salt? Such differences, if any, could affect the demand for and/or price of Tanco's products. This could certainly affect Tanco's profits. Choice (D) presents a question that is important to research, so eliminate (D).

Quote:
E. Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so?

As long as both substances have the same effect on the hides, the mechanisms by which they operate are not important. Perhaps the chemical properties that make potassium chloride an effective means for preserving animal hides are significantly different than the chemical properties that make common salt an effective means for preserving animal hides.

So what? Are hides preserved using potassium chloride different than hides preserved using common salt? Knowing that the properties are different doesn't tell us whether the hides themselves will be different. Researching this question alone would not reveal potential differences in the hides or the resulting leathers.

Simply knowing whether the chemical properties are the same or different would not tell us anything about profits. Thus, this research is not important in determining the impact of the plan on company profits.

That makes (E) our answer.
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Re: Tanco, a leather manufacturer, uses large quantities of common salt to  [#permalink]

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New post 30 Jun 2014, 20:32
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Tanco, a leather manufacturer, uses large quantities of common salt to preserve animal hides. New environmental regulations have significantly increased the cost of disposing of salt water that results from this use, and, in consequence, Tanco is considering a plan to use potassium chloride in place of common salt. Research has shown that Tanco could reprocess the by-product of potassium chloride use to yield a crop fertilizer, leaving a relatively small volume of waste for disposal.

In determining the impact on company profits of using potassium chloride in place of common salt, it would be important for Tanco to research all of the following EXCEPT:

Need to evaluate answer choices keeping cost in mind.
All the answer choices that directly affect cost are valid choices.


A. What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides? - Incorrect. Talks about cost.
B. To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride? - Incorrect. If equipment is not reusable then it will increase cost.
C. What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride? - Incorrect. This will again affect the cost.
D. How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used? - Incorrect. if quality is not the same then this can hamper sale and profits
E. Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so? - Correct. Chemical properties are not relevant here. The answer choice already says that potassium chloride is an effective means of preserving animal hides. So we are not concerned with what is the chemical composition as long as it does the job.
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Re: Tanco, a leather manufacturer, uses large quantities of common salt to  [#permalink]

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New post 18 Jul 2006, 00:10
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Will go with E .

The quality of leather, reuse of existing machines, constrsints on waste disposal and cost of using a different chemical all have some bearing onthe profits of the company.

The chemical properties involved need not be the same.
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Re: Tanco, a leather manufacturer, uses large quantities of common salt to  [#permalink]

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New post 30 Apr 2012, 18:05
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Tanco, a leather manufacturer, uses large quantities of common salt to preserve animal hides. New environmental regulations have significantly increased the cost of disposing of salt water that results from this use, and, in consequence, Tanco is considering a plan to use potassium chloride in place of common salt. Research has shown that Tanco could reprocess the by-product of potassium chloride use to yield a crop fertilizer, leaving a relatively small volume of waste for disposal.

In determining the impact on company profits of using potassium chloride in place of common salt, it would be important for Tanco to research all of the following EXCEPT:

A. What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides?
B. To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride?
C. What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?
D. How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?
E. Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so?

I don't understand the OA.

If chemical properties are considered 'out of topic', isn't 'equipment' from (B) considered 'out of topic' as well?
If Potasium chloride's chemical properties don't work as effective as a common salt, wouldn't that decrease the profit? Because pottasium is not effective, the company should purchase more potassium?

Please help..
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Re: Tanco, a leather manufacturer, uses large quantities of common salt to  [#permalink]

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New post 01 May 2012, 00:30
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uledssul,

The equipment from option (B) is relevant - it is important for the firm to determine if the equipment that they have been using with common salt will also work with potassium chloride. If it does not, then the company will have to spend more in fixing/upgrading/replacing the equipment.

On the other hand, for option (E), the similarity of the chemical properties that make potassium chloride effective with those that make common salt effective are irrelevant - what matters is whether those properties do the job, i.e. preserve animal hides. As long as this is being done, that is all that the manufacturer will care about.

The answer is therefore (E).
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Re: Tanco, a leather manufacturer, uses large quantities of common salt to  [#permalink]

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New post 27 Feb 2015, 04:11
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In determining the impact on company profits of using potassium chloride in place of common salt, it would be important for Tanco to research all of the following EXCEPT --> So, we are looking for an argument which IS NOT IMPORTANT the impact of company profits.

A. What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides? --> is important - PROFIT = Revenue - Costs
B. To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride? --> it is important: if we can not use existing equipment = > COSTs
C. What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride? --> regulations were the cause switch from salt --> potassium, so they are also important to consider in case of potassium (generated costs through regualations)
D. How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used? --> Every company has a recognition value in its products, so if there are changes in quality, look etc IT is important for the company, as it can effect its profits
E. Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so? --> CORRECT. IT is absolutely not important. This sentence says both methods are effective - so, it is irrelevant whether chemical properties are different or not.
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Re: Tanco, a leather manufacturer, uses large quantities of common salt to  [#permalink]

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New post 20 Jun 2016, 05:25
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The answer is E


The question can be simplified as -What is NOT AT ALL IMPORTANT or LEAST IMPORTANT decision for Tanco when switching from NaCl (salt) to KCl (potassium chloride) ?

Lets analyse the options

A. What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides?
Important:-What if cost of salt used by taco annually is only 1$ and Tanco annual profit is 100$ but the annual cost of buying potassium chloride is 100000$ ? Tanco would be either bankrupt or in heavy debt it it does not consider this option carefully.

B. To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride?
Important:-If the existing equipment can't work with potassium then then Tanco will have to buy new equipment. If taco's profit is 100$ and new equipment cost 200000$.Tanco would be either bankrupt or in heavy debt it it does not consider this option carefully.

C. What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?
Important:- The whole switching is happening because of waste disposal. If potassium chloride creates waste that cannot be disposed, then again Tanco is in the same position it earlier was when using salt. Tanco will again have to switch machines, do research again to find another compatible chemical.

D. How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?
Important:- After all Tanco is a leather manufacturer. What if potassium makes the new leather look like a fungus infested pizza or what if potassium makes the new leather melt in sunshine. would anyone buy a pair of leather shoe that melt or a leather jacket that vanishes .No.. Taco would not able to sell the leather.

E. Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so?
NOT IMPORTANT:- This is least important. Why should Tanco worry about what kind of chemical reaction are going on between leather and potassium as long as the final product look like good leather, does not pollute, is cheap and versatile.
See this analogy :- You want to score 770/800 in GMAT. Does it matter whether you study in morning or in night as long as you can score 770.
Does it matter whether your teacher is from Moon-hater :-D or from Berry-toss :o or Keep-long :shock: as long as you are guaranteed to get 770.

SO the answer is E


Tanco, a leather manufacturer, uses large quantities of common salt to preserve animal hides. New environmental regulations have significantly increased the cost of disposing of salt water that results from this use, and, in consequence, Tanco is considering a plan to use potassium chloride in place of common salt. Research has shown that Tanco could reprocess the by-product of potassium chloride use to yield a crop fertilizer, leaving a relatively small volume of waste for disposal.

In determining the impact on company profits of using potassium chloride in place of common salt, it would be important for Tanco to research all of the following EXCEPT:

A. What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides?
B. To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride?
C. What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?
D. How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?
E. Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so?

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Re: Tanco, a leather manufacturer, uses large quantities of common salt to  [#permalink]

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New post 30 Sep 2017, 12:53
A. What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides?
Cost is imp factor to know
B. To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride?
If the equipment used is not compatible with KCL ir potassium cloride then using KCl is not good, so important point
C. What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?
What regulations of waste product generated from using potassium cloride Kcl are for its disposal - if too stringent to dispose then also not good to use KCl => important point.
D. How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?
If there is considerable amount of variation in leather quality that Tanco makes => ie if potassium cloride is making the leather quality inferior by any amount or making superior by any amount is important to know => important point
E. Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so?

Comparing chemical properties of common salt and potassium chloride is useless- so this is the answer
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Re: QOTD: Tanco, a leather manufacturer, uses large quantities  [#permalink]

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New post 08 Mar 2018, 00:06
I would go with option C, because "what are the environmental regulations"...does not affect the profit margins of the company, rest all will affect in one or the other way.

A. Talks about costs (will affect)

B. Equipments also affect as either it may save cost or if not suitable, equipments purchase cost would be involved.

C. "What environmental regulations constrain the disposal".... does not affect the profits in any way.

D. This talks about the quality and similarity of the leather(product), which is an important and contributing factor in profits.

E. Effective preserving is again related to quality of leather.

Thus, I would go with C.

Plzz correct me if I am wrong.



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Re: QOTD: Tanco, a leather manufacturer, uses large quantities  [#permalink]

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New post 08 Mar 2018, 06:51
GOAL: eliminate statements that would directly link with company's profits(as written in question stem)

PROFITS=REVENUE-(CAPITAL INVESTMENT+OPERATING COST + REPROCESSING COST)

A. What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal
hides and the cost of the potassium chloride needed to preserve the same quantity of hides?
operating cost is involved so obviously it will affect the profits
B. To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride?
Capital investment is involved . so obviously it will affect profits
C. What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?
cost of reprocessing . So profits would take a toll
D. How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?
Quality of material produced which is linked to revenues . So profit would take a toll
E. Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so?
chemical properties of the salt we dont need it .
OA: E
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Re: QOTD: Tanco, a leather manufacturer, uses large quantities  [#permalink]

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New post 10 Mar 2018, 07:48
E.

A. What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides?
Incorrect. Has an obvious effect on the profitability of Tanco.

B. To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride?
Incorrect. If we can use the same equipment with potassium chloride as it was being used for common salt, it reduces their costs.

C. What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?
Incorrect. If there are any environmental regulations that would affect the disposal, it might make it more costly for them to dump the potassium chloride, e.g. if there is a policy on very low amounts being dumped, then it increases their costs.

D. How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?
Incorrect. If the consumer can notice the difference and does not like it, then it'll mean reduced revenues and so less profitability.

E. Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so?
Correct. We don't care about the chemical properties. We only care if it does the job.
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Re: QOTD: Tanco, a leather manufacturer, uses large quantities  [#permalink]

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New post 04 Jun 2018, 21:04
SonalSinha803 wrote:
I would go with option C, because "what are the environmental regulations"...does not affect the profit margins of the company, rest all will affect in one or the other way.

A. Talks about costs (will affect)

B. Equipments also affect as either it may save cost or if not suitable, equipments purchase cost would be involved.

C. "What environmental regulations constrain the disposal".... does not affect the profits in any way.

D. This talks about the quality and similarity of the leather(product), which is an important and contributing factor in profits.

E. Effective preserving is again related to quality of leather.

Thus, I would go with C.

Plzz correct me if I am wrong.



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It is very important for Tanco to research Option C. Why is the company even considering replacing potassium chloride in place of common salt. Because of regulations, right? Option C says "What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?".

So imagine, "environmental regulations are not in favour of disposal of the waste generated in reprocessing the by-product of potassium chloride?". This would mean that the company cannot replace potassium chloride in place of common salt. It will have to look for another alternative then.

I hope this explanation helps you. There are other posts in this thread which explain why "E" is the correct answer for this question.

Please revert in case if you need more clarification!! All the best!!
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Re: Tanco, a leather manufacturer, uses large quantities of common salt to  [#permalink]

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New post 14 Jun 2019, 11:35
Hi everyone! Another question that I am going to add my perspective on. Again, NotAnExpert merely a GMAT 'enthusiast'. I use this forum as a space for learning and sharing my learning.

Quote:
Tanco, a leather manufacturer, uses large quantities of common salt to preserve animal hides. New environmental regulations have significantly increased the cost of disposing of salt water that results from this use, and, in consequence, Tanco is considering a plan to use potassium chloride in place of common salt. Research has shown that Tanco could reprocess the by-product of potassium chloride use to yield a crop fertilizer, leaving a relatively small volume of waste for disposal.

In determining the impact on company profits of using potassium chloride in place of common salt, it would be important for Tanco to research all of the following EXCEPT:

(A) What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides?
(B) To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride?
(C) What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride?
(D) How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?
(E) Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so

1. Read and compartmentalize - Fairly straightforward passage, and the question asks me to identify the outlier - i.e. what wouldn't help me make a more informed decision in determining the impact on company profits of using potassium chloride vs salt. The passage itself does not have a conclusion. The consideration of using potassium chloride vs common salt is up for scrutiny.

2. Pre-think when possible - always! - In this type of question whereby I need to eliminate between answer choices, I do not pre-think. I just re-emphasize to myself the key word 'EXCEPT' so I don't make a stupid mistake.

3. Find 4 wrong answers
    (A) What difference, if any, is there between the cost of the common salt needed to preserve a given quantity of animal hides and the cost of the potassium chloride needed to preserve the same quantity of hides? - Because Profit = Revenus - Cost, the difference in cost of raw materials would definitely be something useful to know in determining the impact on company profits.

    (B) To what extent is the equipment involved in preserving animal hides using common salt suitable for preserving animal hides using potassium chloride? - It would be useful to understand the flexibility of capital assets tied up in using common salt. Understanding whether or not the company needs to factor in capital expenditures on long lived equipment would definitely be useful in determing impact on company profits.

    (C) What environmental regulations, if any, constrain the disposal of the waste generated in reprocessing the by-product of potassium chloride? - Although there may be less byproduct because it's being repurposed initially, it would be useful to understand how much the cost associated with disposal is. Who knows, what if it's 100x more expen$ive than the unit disposal cost of common salt. This information is absolutely helpful in understanding the impact on company profits.

    (D) How closely does leather that results when common salt is used to preserve hides resemble that which results when potassium chloride is used?- It would be helpful to understand whether the final product that comes from using potassium chloride materially differs in appearance than the original. If the final product looks different, it could significantly impact on company profits.

    (E) Are the chemical properties that make potassium chloride an effective means for preserving animal hides the same as those that make common salt an effective means for doing so - Bingo! It does not matter whether the chemical properties that make one process effective are shared by the other; the bottom line is that they're effective. Put another way, it doesn't matter whether the ingredients that make Downy effective at removing stains are the same ones that make Tide effective. As long as they cost me the same amount of money at the grocery store, it doesn't impact my grocery bill and so knowing this info doesn't do anything for me.

Hope this was helpful! As always, feedback and comments welcome!
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Re: Tanco, a leather manufacturer, uses large quantities of common salt to   [#permalink] 14 Jun 2019, 11:35
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