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# There are many reasons why individuals want to run their own

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Director
Joined: 12 Oct 2008
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There are many reasons why individuals want to run their own [#permalink]

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22 Feb 2009, 16:55
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There are many reasons why individuals want to run their own businesses. Some foresee more personal satisfaction if they are successful in launching their own business, while others are interested mainly in the prospect of larger financial rewards. Since the late 1970s and early 1980s, tax regulations and other changes have encouraged increasing numbers of venture capitalists and entrepreneurs to start new enterprises. Since 1980, some one-half million new ventures have been started. Not all have succeeded, of course.

The above statement makes which of the following assumptions?

a) Success in starting a new business depends in large part on sound financial planning.
b) Social incentives motivate investors just as much as financial rewards.
c) Financial incentives are associated with new business starts.
d) Most new business ventures succeed initially but fail later on.
e) Venture capitalists are motivated by non-monetary gains.

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Manager
Joined: 10 Jan 2009
Posts: 108

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23 Feb 2009, 04:22
There are many reasons why individuals want to run their own businesses. Some foresee more personal satisfaction if they are successful in launching their own business, while others are interested mainly in the prospect of larger financial rewards. Since the late 1970s and early 1980s, tax regulations and other changes have encouraged increasing numbers of venture capitalists and entrepreneurs to start new enterprises. Since 1980, some one-half million new ventures have been started. Not all have succeeded, of course.

The above statement makes which of the following assumptions?

Explanation:
-------------------
a) Success in starting a new business depends in large part on sound financial planning. ---> Nothing has been mentioned about financial planning.

b) Social incentives motivate investors just as much as financial rewards. ---> We cannot say this for sure. What we can only say is that financial rewards motivate investors as is evident from the excerpt (...tax regulations and other changes have encouraged...).

c) Financial incentives are associated with new business starts. ---> Correct. By process of elimination.

d) Most new business ventures succeed initially but fail later on. ---> This is using an extreme word most. Discard it.

e) Venture capitalists are motivated by non-monetary gains. ---> Nothing is there to substantiate it. This option looks almost same as option B; looks like it has been rephrased with some modifications.
-------------------

My choice is option C.

Hope that helps.

Regards,
Technext
_________________

+++ Believe me, it doesn't take much of an effort to underline SC questions. Just try it out. +++
+++ Please tell me why other options are wrong. +++

~~~ The only way to get smarter is to play a smarter opponent. ~~~

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Senior Manager
Joined: 14 Mar 2007
Posts: 295

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Location: Hungary

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23 Feb 2009, 06:21
I can not think anything better than C, but I am comfortable to select it.

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VP
Joined: 18 May 2008
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23 Feb 2009, 10:43
Clear C

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Director
Joined: 25 Oct 2006
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23 Feb 2009, 11:52
IMO C. Other options are OOS.

In this question assumption is required to map Financial incentives with venture capitalists
_________________

If You're Not Living On The Edge, You're Taking Up Too Much Space

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SVP
Joined: 17 Jun 2008
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25 Feb 2009, 10:26
Option C connects "new business" to "financial rewards". Hence, this should be the answer.

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Retired Moderator
Joined: 18 Jul 2008
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25 Feb 2009, 11:47

ritula wrote:
Clear C

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Intern
Joined: 24 Feb 2009
Posts: 5

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25 Feb 2009, 14:45
Wow! I picked "C" and it took between 1-2 mins. Did I take too long?

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Director
Joined: 04 Jan 2008
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26 Feb 2009, 00:50
source is Barron
can we have the OA pls
_________________

http://gmatclub.com/forum/math-polygons-87336.html
http://gmatclub.com/forum/competition-for-the-best-gmat-error-log-template-86232.html

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Retired Moderator
Joined: 18 Jul 2008
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27 Feb 2009, 07:06

Kudos [?]: 294 [0], given: 5

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