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

Question

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.

laddaboy · Answer

I think B is the best fit.
 A,c,e are out of scope.
D seems extreme.
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lostin · Answer

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.

Shobhit7 · Answer

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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TaN1213 · Answer

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

hassanahmed · Answer

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.

Rahul5843 · Answer

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.

dcummins · Answer

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.

BijayKru · Answer

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)

ssaamm · Answer

cant get why option d is wrong.please help out.not able to rule it out with negation also

Hovkial · Answer

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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Bunuel · Answer

Official Explanation

Answer: C

The argument assumes that the only way to maximize owner’s value is by increasing sales. This can lead us to several passive assumptions. C contains one such assumption. Notice that if you negate C, the argument will fall apart.

(A) Whether business owners agree with this definition is irrelevant.
(B) This weakens the argument whereas we need to find an assumption.
 (C) The correct answer. 
(D) This is directly stated in the argument so cannot be its assumption.
(E) This could be an inference but is definitely not an assumption.

apurv09 · Answer

it says that business is spending the money on the workplace. while in the question it depends on how the employees use the funds they have got.
 it can so happen that business gives the moeny for right reason but employee cheats

mkeshri185 · Answer

I can't agree with this explanation. I would go for D its better than C.
The passage says the Main purpose is to inc sales->inc shareholder value , and then ends the passage by saying if you are using it somewhere else than sales then you are cheating. so the passage is linking the Main purpose with the only purpose , which means funds are not allowed to be spent 'ANYWHERE'.

C only talks about only one possible expenditure. If it is ruled out doesn't means there are not other possible expenditure available than sales. what if the money is not spent on extra bonuses? According to passage it will still be considered cheating bcz its not spent on sales. But option C doesn't count that possibility.

D uses extreme word but we indeed need extreme word here, bcz according to author Money spent "NOT' on sales is equal to "CHEATING". so to hold it true we need to assume that the only purpose of business is to increase the sales and thereby increase the shareholder value.

gullyboy09 · Answer

Hi  MartyMurray ,  IanStewart  can you please help me with this question? Here IMO, main purpose is "to maximize shareholder value over the long term by selling goods or services" and not "to maximize shareholder value". Now even if C is true, shareholder value does increase, then still its' cheating because purpose is to maximize it by selling goods/services, and not just to maximize. Please correct my understanding here.

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.

guddo · Answer

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?

The argument says employees cheat shareholders if they use funds for anything other than increasing sales.  The missing idea  is that spending money on other things does not indirectly increase shareholder value. If some non-sales spending increases productivity and profits, then it would not necessarily cheat shareholders.

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

Wrong. The argument does not depend on whether most business owners agree.

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

Wrong. This weakens the argument. If shareholder value can be maximized in ways other than increasing sales, then non-sales spending is not automatically cheating.

(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. If workplace-comfort spending increased productivity and profits, then spending funds on it could benefit shareholders even without directly increasing sales. So the argument must assume that this kind of non-sales spending does not increase shareholder value.

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

Wrong. This is close to the premise, but it does not connect the conclusion to sales specifically. Even if shareholder return is the only function, some non-sales spending could still increase that return.

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

Wrong. This may be a consequence of the argument, but it is not an assumption needed to reach the conclusion.

Answer: (C)

IanStewart · Answer

Yes, you're definitely right. There are actually maybe five different problems with this question (it is clearly not an official problem), and I won't list them all, but I wouldn't worry about this question much. Of the five answer choices, D is by far the best, logically speaking. The biggest logic issue here is the scope shift from the first sentence of the stem to the second. The first sentence only talks about the "main purpose" of business, but the second seems to suggest business can only have one purpose, sales, since an employee is 'cheating shareholders' by devoting funds to any other activity. So the argument only makes any sense if sales is the lone purpose of business (or at least the only purpose an employee could devote funds to), and the correct answer needs to address that gaping logical hole in the argument.

That said, this question very much feels like a poor copy of an official question. I've seen a few official problems that look a bit like this one, where the right answer does, logically speaking, what answer C is attempting to do here. So if I saw a similar question on a real test, I'd actually be looking out for an answer that looks a bit like answer C here. But this question is not worded precisely enough to make answer C work.

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

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