It is currently 18 Nov 2017, 09:26

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

To avoid a hostile takeover attempt, the board of directors

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
GMAT Club Legend
GMAT Club Legend
User avatar
Joined: 07 Jul 2004
Posts: 5032

Kudos [?]: 452 [0], given: 0

Location: Singapore
To avoid a hostile takeover attempt, the board of directors [#permalink]

Show Tags

New post 07 Sep 2005, 07:03
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions

HideShow timer Statistics

To avoid a hostile takeover attempt, the board of directors of Wellco, Inc., a provider of life and health insurance, planned to take out large loans and use them to purchase a publishing company, a chocolate factory, and a nationwide chain of movie theaters. The directors anticipated that these purchase initially would plunge the corporation deep into debt, rendering it unattractive to those who wanted to take it over, but that steadily rising insurance rates would allow the company to pay off the debt within five years. Meanwhile, revenues from the three new businesses would enable the corporation as a whole to continue to meet its increased operating expenses. Ultimately, according o the directors’ plan, the diversification would strengthen the corporation by varying the sources and schedules of its annual revenues.

Which of the following, assuming that all are equally possible, would most enhance the chances of the plan’s success?
(A) A widespread drought decreases the availability of cacao beans, from which chocolate is manufacture, diving up chocolate prices worldwide.
(B) New government regulations require a 30 percent across-the-board rate rollback of all insurance companies, to begin immediately and to be completed within a five-year period.
(C) Congress enacts a statute, effective after six months, making it illegal for any parent not to carry health insurance coverage for his or her child.
(D) Large-screen televisions drop dramatically in price due to surprise alterations in trade barriers with Japan; movie theater attendance dwindles as a consequence.
(E) A new, inexpensive process is discovered for making paper pulp, and paper prices fall to 60 percent of their former level.

Kudos [?]: 452 [0], given: 0

Manager
Manager
avatar
Joined: 31 Jul 2005
Posts: 86

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

 [#permalink]

Show Tags

New post 07 Sep 2005, 09:19
c over e. I like the mandatory health insurance for children (increased demand for core product) vs lower cost of paper (complementary business & no mention of demand).

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

Senior Manager
Senior Manager
avatar
Joined: 11 May 2004
Posts: 453

Kudos [?]: 54 [0], given: 0

Location: New York
 [#permalink]

Show Tags

New post 07 Sep 2005, 09:30
C

Everything else would cause a negative effect on what the company is doing.

Kudos [?]: 54 [0], given: 0

Manager
Manager
User avatar
Joined: 28 Jan 2004
Posts: 197

Kudos [?]: 8 [0], given: 0

Location: Ghana
 [#permalink]

Show Tags

New post 08 Sep 2005, 01:41
C for me.
_________________

It's not over until it's OVER!

Kudos [?]: 8 [0], given: 0

Senior Manager
Senior Manager
avatar
Joined: 15 Aug 2005
Posts: 257

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

Location: Las Vegas, NV
 [#permalink]

Show Tags

New post 08 Sep 2005, 09:40
C works best because the plan hinges on the business' forecast of increased insurance rates.

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

Intern
Intern
avatar
Joined: 30 Aug 2005
Posts: 26

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

Location: Pattikadu
 [#permalink]

Show Tags

New post 08 Sep 2005, 10:16
clear C, an easy one

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

SVP
SVP
User avatar
Joined: 16 Oct 2003
Posts: 1798

Kudos [?]: 173 [0], given: 0

 [#permalink]

Show Tags

New post 08 Sep 2005, 10:21
C is the only one enhancing revenue.

Kudos [?]: 173 [0], given: 0

SVP
SVP
User avatar
Joined: 28 May 2005
Posts: 1699

Kudos [?]: 480 [0], given: 0

Location: Dhaka
 [#permalink]

Show Tags

New post 08 Sep 2005, 15:34
My pick is C
_________________

hey ya......

Kudos [?]: 480 [0], given: 0

Senior Manager
Senior Manager
avatar
Joined: 27 Aug 2005
Posts: 331

Kudos [?]: 199 [0], given: 0

Location: Montreal, Canada
 [#permalink]

Show Tags

New post 08 Sep 2005, 19:31
I stopped reading after seeing the words "chocolate factory" and then pausing to eat some chocolate. :-D

Kudos [?]: 199 [0], given: 0

Manager
Manager
avatar
Joined: 01 Jun 2005
Posts: 69

Kudos [?]: 6 [0], given: 0

 [#permalink]

Show Tags

New post 09 Sep 2005, 04:46
C for me.

Kudos [?]: 6 [0], given: 0

Director
Director
avatar
Joined: 05 Jul 2004
Posts: 893

Kudos [?]: 68 [0], given: 0

 [#permalink]

Show Tags

New post 09 Sep 2005, 05:10
(C). Main focus is to increase revenues from health insurance.

Kudos [?]: 68 [0], given: 0

GMAT Club Legend
GMAT Club Legend
User avatar
Joined: 07 Jul 2004
Posts: 5032

Kudos [?]: 452 [0], given: 0

Location: Singapore
 [#permalink]

Show Tags

New post 10 Sep 2005, 05:26
OA is C.

Kudos [?]: 452 [0], given: 0

  [#permalink] 10 Sep 2005, 05:26
Display posts from previous: Sort by

To avoid a hostile takeover attempt, the board of directors

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  

Moderators: GMATNinjaTwo, GMATNinja



GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.