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The two divisions of a high-tech company have performed quite consiste

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The two divisions of a high-tech company have performed quite consiste  [#permalink]

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New post Updated on: 20 Jan 2019, 01:43
3
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A
B
C
D
E

Difficulty:

  45% (medium)

Question Stats:

68% (01:36) correct 32% (01:54) wrong based on 215 sessions

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The two divisions of a high-tech company have performed quite consistently over the past five years. In each year, the telecommunications equipment division accounted for 35 percent of profits and 15 percent of revenues, and the high-speed internet division made up the balance.

Which of the following can properly be inferred regarding the past five years from the information above?


A. The telecommunications equipment division has made higher profits per dollar than the high-speed internet division.

B. Sales for both divisions have remained flat over the five years.

C. The high-speed-internet market involved tougher competition than the telecommunications equipment market during the past five years.

D. Management devoted a greater number of company resources to the telecommunications equipment division than to the high-speed internet division over the past five years.

E. More profitable products made up a higher percentage of the products offered by the telecommunications division.

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Originally posted by iwillcrackgmat on 14 Mar 2012, 00:44.
Last edited by Bunuel on 20 Jan 2019, 01:43, edited 1 time in total.
Renamed the topic, edited the question and added the OA.
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Re: The two divisions of a high-tech company have performed quite consiste  [#permalink]

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New post 14 Mar 2012, 01:18
A. The telecommunications equipment division has made higher profits per dollar than the high-speed internet division.

as per question:
T= 0.35 P; 0.15 R
I= 0.65 P ; 0.85 R

hence A can be deduced properly.

imo A
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New post 14 Mar 2012, 04:27
Is there any reason why C couldn't be the right answer ??
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New post 14 Mar 2012, 04:54
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iwillcrackgmat wrote:
Is there any reason why C couldn't be the right answer ??


we have no other information like overall market situation or anything that can reflect the status of the two products separately in the market. we cant predict anything about the market by the information present in the argument. Argument just throws the info that can help us conclude regarding the products in the same company.
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Re: The two divisions of a high-tech company have performed quite consiste  [#permalink]

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New post 22 Apr 2012, 10:44
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The two divisions of a high-tech company have performed quite consistently over the past five years. In each year, the telecommunications equipment division accounted for 35 percent of profits and 15 percent of revenues, and the high-speed internet division made up the balance. Which of the following can properly be inferred regarding the past five years from the information above?

Fact 1 - the data provided is for 5 years
Fact 2 - Contribution by each department towards profits & revenue.
No where in the stimulus the explanation for the Contribution by each department towards profits & revenue is provided


A. The telecommunications equipment division has made higher profits per dollar than the high-speed internet division.
-- Looks good. Discusses profits. I'd keep it as a contender.
B. Sales for both divisions have remained flat over the five years.
-- Sales of either department are not discussed in the stimulus. So, cannot infer this.
C. The high-speed-internet market involved tougher competition than the telecommunications equipment market during the past five years.
-- Explanation for why one department fared better than the other. Cannot infer this too.
D. Management devoted a greater number of company resources to the telecommunications equipment division than to the high-speed internet division over the past five years.
-- Discusses the devotion of the management, never discusses in the stimulus. So, cannot infer this too.
E. More profitable products made up a higher percentage of the products offered by the telecommunications division.
-- Explains why one department made more profits than the other. So, this cannot be inferred.

This leaves us with only option A. And if you look closer at A it makes more sense when the information in the stimulus is broken-up like:
telecommunications div - for every 15% revenue --> it leads to 35% profits
high-speed internet div - for every 85% revenue --> it leads to 65% profits
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Re: The two divisions of a high-tech company have performed quite consiste  [#permalink]

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New post 19 Jan 2019, 06:35
Hi GMATNinja,

Can you please explain how the correct answer is A here? I didn't understand the meaning of revenue here. And how to relate the revenue with profits?

Profit = SP - CP
Revenue is also the same, right?
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Re: The two divisions of a high-tech company have performed quite consiste   [#permalink] 19 Jan 2019, 06:35
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