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# The Hale Burton Oil Pipeline Construction Corporation has

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Intern
Joined: 08 Apr 2013
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The Hale Burton Oil Pipeline Construction Corporation has [#permalink]

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12 Apr 2013, 04:44
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Question Stats:

80% (01:24) correct 20% (01:35) wrong based on 245 sessions

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The Hale Burton Oil Pipeline Construction Corporation has had a bad quarter. Rather than lay off workers to cut costs, however, it will simply defer salaries for 30 days and hold them in a mutual fund to pick up interest to cover expenses. By doing this the company and its employees will avoid the negative consequences often associated with earning shortfalls.

Which of the following, if true, is the best criticism of the corporation,Aos plan?
A. Employees will not be able to control which mutual funds the salaries will be diverted into.
B. The corporation cannot save money by cutting staff because it is already understaffed.
C. Some employees will need to borrow money to hold them over until the 30 days are up and they will consequently have 30 days of interest on these loans.
D. Some employees will not be affected by the rollover because they have savings.
E. The corporation's budget was cut by 15% last year.

[Reveal] Spoiler: OA

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12 Apr 2013, 05:28
1
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The Hale Burton Oil Pipeline Construction Corporation has had a bad quarter. Rather than lay off workers to cut costs, however, it will simply defer salaries for 30 days and hold them in a mutual fund to pick up interest to cover expenses.
FACTS
By doing this the company and its employees will avoid the negative consequences often associated with earning shortfalls.
Conclusion

Which of the following, if true, is the best criticism of the corporation,Aos plan?
We have to look for an answer that shows that: despite the plan, employees will experience "negative consequences".

A. Employees will not be able to control which mutual funds the salaries will be diverted into.
This doesn't mean any "negative consequences".
B. The corporation cannot save money by cutting staff because it is already understaffed.
Again, no "negative consequences" can be deducted from this.
C. Some employees will need to borrow money to hold them over until the 30 days are up and they will consequently have 30 days of interest on these loans.
Correct. 30 days of interests are a bad consequence for the employees.
D. Some employees will not be affected by the rollover because they have savings.
No "negative consequences" here.
E. The corporation's budget was cut by 15% last year.
This is a fact that doesn't affect the conclusion.
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12 Apr 2013, 11:55
1
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sandra1122 wrote:
The Hale Burton Oil Pipeline Construction Corporation has had a bad quarter. Rather than lay off workers to cut costs, however, it will simply defer salaries for 30 days and hold them in a mutual fund to pick up interest to cover expenses. By doing this the company and its employees will avoid the negative consequences often associated with earning shortfalls.

Which of the following, if true, is the best criticism of the corporation,Aos plan?
A. Employees will not be able to control which mutual funds the salaries will be diverted into.
B. The corporation cannot save money by cutting staff because it is already understaffed.
C. Some employees will need to borrow money to hold them over until the 30 days are up and they will consequently have 30 days of interest on these loans.
D. Some employees will not be affected by the rollover because they have savings.
E. The corporation's budget was cut by 15% last year.

Hi
This is a question that deals with plan and its effect.
the plan here is to bridge the earning shortfall by investing the salary in mutual funds.
option C: States that Some employees will borrow. this borrowing will have an interest, hence it casts doubt on the objective of the plan....they may earn a little of profit but that can be negated by the interest of another loan.

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Re: The Hale Burton Oil Pipeline Construction Corporation has [#permalink]

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09 Sep 2017, 12:46
1
KUDOS
Hi, can anyone explain why not A? Because, if funds are being directed in mutual funds, it can still lead to losses.... And C talks about negative personal fall out not company fallout..So C didn't seem in the company benefit. Would like some detail on the OA. Thanks!

The Hale Burton Oil Pipeline Construction Corporation has had a bad quarter. Rather than lay off workers to cut costs, however, it will simply defer salaries for 30 days and hold them in a mutual fund to pick up interest to cover expenses. By doing this the company and its employees will avoid the negative consequences often associated with earning shortfalls.

Type - weaken
Boil it down - The plan will help company and its employees avoid the negative consequences associated with earning shortfalls

A. Employees will not be able to control which mutual funds the salaries will be diverted into. - Irrelevant - The mutual fund does not matter as long as it provides interest to cover up expenses
B. The corporation cannot save money by cutting staff because it is already understaffed. - Irrelevant - cutting staff is not in the plan
C. Some employees will need to borrow money to hold them over until the 30 days are up and they will consequently have 30 days of interest on these loans. - Correct - since employees will have to pay interest on loans, it will have an adverse effect on them.
D. Some employees will not be affected by the rollover because they have savings. - mild strengthener - but what about the other employees who don't have sufficient savings
E. The corporation's budget was cut by 15% last year. - Irrelevant - it does not affect our plan

Madhavi1990 - the conclusion clearly mentions about avoiding the negative consequences for both the company and its employees , but C tells that some employees will suffer if the plan is implemented .

Hope this helps!!
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13 Apr 2013, 05:25
I didn't realize at first that borrowing generates interest, I though the interest was earned...
Thanks guys.

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Re: The Hale Burton Oil Pipeline Construction Corporation has [#permalink]

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30 Jun 2014, 08:21
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).

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Re: The Hale Burton Oil Pipeline Construction Corporation has [#permalink]

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16 Oct 2016, 06:46
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.

Kudos [?]: 270 [0], given: 0

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Joined: 15 Jan 2017
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Kudos [?]: 21 [0], given: 673

Re: The Hale Burton Oil Pipeline Construction Corporation has [#permalink]

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09 Sep 2017, 12:22
Hi, can anyone explain why not A? Because, if funds are being directed in mutual funds, it can still lead to losses.... And C talks about negative personal fall out not company fallout..So C didn't seem in the company benefit. Would like some detail on the OA. Thanks!

Kudos [?]: 21 [0], given: 673

Senior Manager
Joined: 15 Jan 2017
Posts: 295

Kudos [?]: 21 [0], given: 673

Re: The Hale Burton Oil Pipeline Construction Corporation has [#permalink]

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09 Sep 2017, 12:51
Skywalker18 wrote:
Hi, can anyone explain why not A? Because, if funds are being directed in mutual funds, it can still lead to losses.... And C talks about negative personal fall out not company fallout..So C didn't seem in the company benefit. Would like some detail on the OA. Thanks!

The Hale Burton Oil Pipeline Construction Corporation has had a bad quarter. Rather than lay off workers to cut costs, however, it will simply defer salaries for 30 days and hold them in a mutual fund to pick up interest to cover expenses. By doing this the company and its employees will avoid the negative consequences often associated with earning shortfalls.

Type - weaken
Boil it down - The plan will help company and its employees avoid the negative consequences associated with earning shortfalls

A. Employees will not be able to control which mutual funds the salaries will be diverted into. - Irrelevant - The mutual fund does not matter as long as it provides interest to cover up expenses
B. The corporation cannot save money by cutting staff because it is already understaffed. - Irrelevant - cutting staff is not in the plan
C. Some employees will need to borrow money to hold them over until the 30 days are up and they will consequently have 30 days of interest on these loans. - Correct - since employees will have to pay interest on loans, it will have an adverse effect on them.
D. Some employees will not be affected by the rollover because they have savings. - mild strengthener - but what about the other employees who don't have sufficient savings
E. The corporation's budget was cut by 15% last year. - Irrelevant - it does not affect our plan

Madhavi1990 - the conclusion clearly mentions about avoiding the negative consequences for both the company and its employees , but C tells that some employees will suffer if the plan is implemented .

Hope this helps!!

Kudos [?]: 21 [0], given: 673

Re: The Hale Burton Oil Pipeline Construction Corporation has   [#permalink] 09 Sep 2017, 12:51
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