akhil911
My question is why is D or E not correct and C correct - is it because of the use of with in choices D and E or do they contain any additional error.
The only difference between C and D is the usage of with and which.
Can someone please guide on the usage of these words.
Dear Akhil,
Thank you for your query.

You are correct. Structurally speaking, the difference between C and D is the difference between their respective uses of “which” and “with”. However, logically speaking, choice C is any day a lot clearer in conveying the intended meaning of the author than either choice D or E is. Let’s see why:
In choice D or E, it is not clear exactly how the prepositional phrase starting with “with” relates back to the sentence. Now, the whole phrase starting with “with” is a prepositional phrase, which can modify either a noun or a verb. Accordingly, the two possible things that could be modified with this modifier are (ref: underlined sections) :
a. The results of the company's cost-cutting measures
are evident in its profits…
or
b. The results of the company's cost-cutting measures are evident in its
profits…
Now, the context of the sentence dictates that the “with” phrase modify “profits” as, logically speaking, the profits have increased after falling for two years. So let’s test whether this meaning comes across clearly with the “with” modifiers :
(D) The results of the company's cost-cutting measures are evident in its profits, with a five percent increase during the first three months of this year after falling over the last two years.
(E) The results of the company's cost-cutting measures are evident in its profits, with a five percent increase during the first three months of this year after having fallen over the last two years.
Now, do you think that the “with” modifiers in the above two sentences clearly refer back to the profits?! The answer is NO! This is because these phrases could be deemed as modifying the action in the previous clause. In other words, it could be taken to suggest that:
The results are evident because of a five percent increase during the first three months of this year after falling over the last two years. The above meaning makes logical sense. However, is this sense compatible with the intended meaning of the author? The answer is NO! Also, besides the fact that choices D and E form rather awkward sentences, in the “with” modifying phrases, we are just told about a five percent increase, but we are not told exactly what entity has increased during the first three months of
this year. The same goes for the “falling” bit. We do not know exactly what fell
over the last two years.
Accordingly, it makes more sense to use “which” here. This is because “which” is typically used to convey extra-information about the noun preceding it. In the correct choice, “which” unambiguously refers back to “profits”. A simple example of the same usage is explained below:
The green shoes, which I tried on, are designed by the famous shoe designer Romano Ray.In the above sentence, the noun “shoes” is already described as “green” in color. Therefore, the “which” clause-
which I tried on- gives us extra information about the shoes.
To solidify your understanding of the topic and to learn the nuances of the same, please visit our in-depth article on the subject:
https://gmatclub.com/forum/noun-modifier ... 35868.htmlPlease also revise the concept of “Types of modifier” if you are an e-GMATer.
Hope the above discussion helps!

Regards,
Neeti.