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The profitability of a restaurant can be judged by neither

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Senior Manager
Joined: 12 Oct 2009
Posts: 256

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The profitability of a restaurant can be judged by neither [#permalink]

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19 Mar 2011, 13:05
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Difficulty:

35% (medium)

Question Stats:

88% (00:41) correct 13% (01:18) wrong based on 16 sessions

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The profitability of a restaurant can be judged by neither the consistency of its overhead costs nor its daily receipts alone. Consistent overhead costs can be undercut by declining daily receipts, and high daily receipts may not signal significant profits if overhead costs increase. Both must be balanced in order to accurately evaluate how profitable a restaurant actually is.

The passage to the left, if true, implies that the best indicator of a restaurant’s profitability is the restaurant’s:

A ) Consistent overhead costs balanced by high daily receipts.
B) Consistent overhead costs offset by declining daily receipts.
C) Increased overhead costs balanced by high daily receipts.
D) Decreased overhead costs offset by declining daily receipts.
E) Consistent daily receipts balanced by high overhead costs.
[Reveal] Spoiler: OA

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Manager
Joined: 05 Jan 2011
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19 Mar 2011, 21:27
I think it's A .

Premise :Consistent overhead costs can be undercut by declining daily receipts, and high daily receipts may not signal significant profits if overhead costs increase. Both must be balanced in order to accurately evaluate how profitable a restaurant actually is.

Conclusion : The profitability of a restaurant can be judged by neither the consistency of its overhead costs nor its daily receipts alone.

Premise tells Both must be balanced in order to accurately evaluate how profitable a restaurant actually is..Thus, we can say that best indicator of a restaurant’s profitability is balanced consistency of its overhead costs and receipt

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20 Mar 2011, 03:58
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Re: CR Restaurant Profitability   [#permalink] 20 Mar 2011, 03:58
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The profitability of a restaurant can be judged by neither

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