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pranjalshah
Joined: 11 Dec 2023
Last visit: 04 Feb 2026
Posts: 103
Given Kudos: 202
Location: India
Concentration: Operations, General Management
Schools: ISB '27 (A$$$$)
GMAT Focus 1: 735 Q90 V87 DI82 
07 Aug 2024, 11:56
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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
74% (01:34) correct
26%
(01:45)
wrong
based on 701
sessions
History
Date
Time
Result
Not Attempted Yet
The XKP Corporation needs to move its headquarters to a new facility. It can either borrow money to buy a small building or rent a building similar to what it would buy. The corporation will have to spend more on loan payments and interest this year if it buys instead of rents. But the amount will stay fixed from year to year, while rental rates will gradually increase over the years. The company is thus likely to borrow money to purchase a building, because _________.
Which of the following most logically completes the passage?
A. the interest rate on the borrowed money would be lower than what the company pays on older loans
B. it anticipates future growth and ongoing requirements of larger facilities
C. it would be responsible for maintenance of the only suitable facility available for rent
D. it expects to rent additional, smaller facilities to support its various operations
E. It would keep the purchased building as its headquarters for more than twenty years
Which of the following most logically completes the passage?
A. the interest rate on the borrowed money would be lower than what the company pays on older loans
B. it anticipates future growth and ongoing requirements of larger facilities
C. it would be responsible for maintenance of the only suitable facility available for rent
D. it expects to rent additional, smaller facilities to support its various operations
E. It would keep the purchased building as its headquarters for more than twenty years
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11 Aug 2024, 13:33
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A - The question doesn’t mention any info related to older loans. Hence, the comparison is out of context.
B - This can be considered a premise to explain why renting or buying is being contemplated. However, it doesn’t explain why the company would prefer buying over renting.
C - Irrelevant. The question doesn’t mention maintenance as a decisive factor.
D - Additional info which doesn’t explain why the company would prefer buying over renting.
E - As rents increase year on year basis, expenditure incurred in buying vis-à-vis renting would be beneficial only if the timeline is larger. Hence, E.
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B - This can be considered a premise to explain why renting or buying is being contemplated. However, it doesn’t explain why the company would prefer buying over renting.
C - Irrelevant. The question doesn’t mention maintenance as a decisive factor.
D - Additional info which doesn’t explain why the company would prefer buying over renting.
E - As rents increase year on year basis, expenditure incurred in buying vis-à-vis renting would be beneficial only if the timeline is larger. Hence, E.
Posted from my mobile device
