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The main purpose of business is to maximize shareholder value over the

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New post Updated on: 05 Nov 2018, 05:38
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The main purpose of business is to maximize shareholder value over the long term by selling goods or services. Thus, employees who use funds for anything other than to increase their sales are simply cheating the shareholders.

Which of the following is an assumption made in drawing the conclusion above?


(A) Most business owners would agree with the above definition of the purpose of a business.

(B) Increasing sales is not the only way to maximize shareholder value.

(C) Spending money on making the workplace more comfortable for employees will not lead to increased worker productivity and in turn increased business profits.

(D) The only function of a business is to maximize returns for its shareholders.

(E) According to this definition, many employees could be accused of cheating.



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Originally posted by carcass on 08 Jan 2018, 16:36.
Last edited by Bunuel on 05 Nov 2018, 05:38, edited 1 time in total.
Renamed the topic and edited the question.
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New post 08 Jan 2018, 18:16
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I think B is the best fit.
A,c,e are out of scope.
D seems extreme.
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New post Updated on: 08 Jan 2018, 18:44
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carcass wrote:



The main purpose of business is to maximize shareholder value over the long term by selling goods or services. Thus, employees who use funds for anything other than to increase their sales are simply cheating the shareholders.

Which of the following is an assumption made in drawing the conclusion above?

(A) Most business owners would agree with the above definition of the purpose of a business.
(B) Increasing sales is not the only way to maximize shareholder value.
(C) Spending money on making the workplace more comfortable for employees will not lead to increased worker productivity and in turn increased business profits.
(D) The only function of a business is to maximize returns for its shareholders.
(E) According to this definition, many employees could be accused of cheating.

Kudo for the right solution and explanation


IMO - C

Stem - Main purpose of business - Maximize shareholder value by selling goods and services
Employees must spend funds on increasing sales only else they are cheating shareholders.

Option A - Stem talks about shareholders not mention of the business owners.
Option B - Stem assumption is opposite.
Option C - I will hold it as stem assumes only way to maximize returns for shareholders is to increase sales
Option D - Stem talks about the purpose of a business function. Two very different things.
Option E - Irrelevant.

Will wait for OA.
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Originally posted by lostin on 08 Jan 2018, 18:22.
Last edited by lostin on 08 Jan 2018, 18:44, edited 1 time in total.
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New post 08 Jan 2018, 18:37
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IMO C

(A) Most business owners would agree with the above definition of the purpose of a business. :
CANNOT CHALLENGE THE FACTS STATED IN PREMISE

(B) Increasing sales is not the only way to maximize shareholder value.:
OUT OF SCOPE TO DISCUSSION

(C) Spending money on making the workplace more comfortable for employees will not lead to increased worker productivity and in turn increased business profits.:
CORRECT. THIS CHOICE DEFENDS AGAINST A WEAKENER.

(D) The only function of a business is to maximize returns for its shareholders.:
SAME AS B

(E) According to this definition, many employees could be accused of cheating.:
IRRELEVANT TO CONCLUSION

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New post Updated on: 08 Jan 2018, 22:18
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The main purpose of business is to maximize shareholder value over the long term by selling goods or services. Thus, employees who use funds for anything other than to increase their sales are simply cheating the shareholders.

Which of the following is an assumption made in drawing the conclusion above?

(A) Most business owners would agree with the above definition of the purpose of a business. Out of scope for an assumption
(B)Increasing sales is not the only way to maximize shareholder value
weakening the conclusion
(C) Spending money on making the workplace more comfortable for employees will not lead to increased worker productivity and in turn increased business profits.
-spending money in this case is helping the business,not the shareholders. So, such employees are cheating the stakeholders. CORRECT
(D) The only function of a business is to maximize returns for its shareholders. And Irrelevant to the conclusion
(E) According to this definition, many employees could be accused of cheating. Out of Scope
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Originally posted by TaN1213 on 08 Jan 2018, 19:39.
Last edited by TaN1213 on 08 Jan 2018, 22:18, edited 2 times in total.
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New post 08 Jan 2018, 22:10
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Its C.
Assumption: increasing sales is the only way to increase shareholder values.
B is the complete opposite to this assumption.
C says this in other way that other methods of increasing sales will not work. Also, negating this choice makes the argument to fall apart.
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New post 12 Jan 2018, 02:50
The main purpose of business is to maximize shareholder value over the long term by selling goods or services. Thus, employees who use funds for anything other than to increase their sales are simply cheating the shareholders.

Which of the following is an assumption made in drawing the conclusion above?

(A) Most business owners would agree with the above definition of the purpose of a business.
(B) Increasing sales is not the only way to maximize shareholder value.
(C) Spending money on making the workplace more comfortable for employees will not lead to increased worker productivity and in turn increased business profits.
(D) The only function of a business is to maximize returns for its shareholders.
(E) According to this definition, many employees could be accused of cheating.

Hi,
Let's start with the conclusion
"Thus, employees who use funds for anything other than to increase their sales are simply cheating the shareholders. "
Premise:-
"The main purpose of business is to maximize shareholder value over the long term by selling goods or services"

Let's do some pre thinking before starting with the POE.
Acc. to the argument employees using funds for anything other than increasing sales will not indirectly help in increasing the sales.

D is exactly in line with this and hence the answer.
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New post 01 Jul 2019, 17:57
The author argues that if employees use funds for anything other than on sales then they are cheating their shareholders.
This is based on the premise that the main purpose of the business is to maximise shareholder value.

What terms need justification in the conclusion? The link between shareholders and shareholder value.

A is completely irrelevant to the argument
B weakens the argument because the argument clearly states that increasing sales is the only way - "funds (used) for anything other than sales... are cheating shareholders"
C is the correct answer choice because it denies the possibility of an alternate cause that would otherwise weaken the argument. This denial strengthens the argument.
You can negate it to check: "spending money on making the workplace more comfortable for employees will lead to increased worker productivity and in turn increased productivity" thus the author denies this to be true in making his conclusion. Key!
D - This is not conducive to the argument as the argument deals with methods by which employees can increase shareholder value, not the function of a business itself
E - this is completely irrelevant.
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New post 01 Jul 2019, 18:58
The main purpose of business is to maximize shareholder value over the long term by selling goods or services. Thus, employees who use funds for anything other than to increase their sales are simply cheating the shareholders.

Which of the following is an assumption made in drawing the conclusion above?


(A) Most business owners would agree with the above definition of the purpose of a business. ''

Use of MOST incorrect: We don't know Most business owner or All business Owner ( So WRONG)

(B) Increasing sales is not the only way to maximize shareholder value.

Negating our premises. (WRONG)

(C) Spending money on making the workplace more comfortable for employees will not lead to increased worker productivity and in turn increased business profits.

I will come to this point, But lets go with D and E. After looking D and E--> There is only 1 opt left which is 100% CORRECT.

Obviously, We are not sure making the workplace more comfortable the emp's will work or they will enjoy. So This is the CORRECT one.

(D) The only function of a business is to maximize returns for its shareholders.

The only Function : WRONG. ( Extreme word) ( WRONG)

(E) According to this definition, many employees could be accused of cheating.

General Truth. But we are not sure many emp. could be accused of cheating or some emp. ( WRONG)
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New post 10 Jul 2019, 23:41
cant get why option d is wrong.please help out.not able to rule it out with negation also
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Re: The main purpose of business is to maximize shareholder value over the  [#permalink]

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New post 10 Jul 2019, 23:51
The stem asserts that employees should not be doing anything besides making sales. So, it has ruled out other activities as useful that may help generate more sales, such as making the workplace more comfortable.

Only C directly references this assumption.

Other choices either restate parts of the argument, avoid the hidden assumption or make broad irrelevant points.

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Re: The main purpose of business is to maximize shareholder value over the   [#permalink] 10 Jul 2019, 23:51
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