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# To encourage innovation, the M3 Corporation has a goal of

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GMAT Club Legend
Joined: 15 Dec 2003
Posts: 4288
To encourage innovation, the M3 Corporation has a goal of [#permalink]

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21 Aug 2004, 16:13
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To encourage innovation, the M3 Corporation has a goal of achieving 50 percent of its annual revenues from sales of products that are no more than 3 years old. Last year, M3 Corporation achieved this goal, despite the fact that the company introduced no new products during the year.

Which of the following, if true, best explains the results described above?
A) Sales of many of the company's older products were discontinued during the last year
B) The company has introduced very few new products during the last 3 years
C) The company's single best-selling product was introduced more than 15 years ago
D) Company spending on R&D has increased slightly over the past 5 years
E) Scientists at the company report that they are close to breakthroughs that should result in several new products during the coming year
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Paul

Senior Manager
Joined: 07 Oct 2003
Posts: 350
Location: Manhattan

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21 Aug 2004, 17:50
good question

new products that 3M (that's the real name anyway) has developed in the first two of the last 3 years is what's putting the bacon on the table. However, to keep achieving their objective of relying on new products to generate growth, company must come up with new ideas or else this plan will fail. E makes sense.
Manager
Joined: 28 Jul 2004
Posts: 179

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21 Aug 2004, 20:13
I beg to defer. My understanding of the question is as follows.

Last year the company didnt make any new products. Inspite of the no new products made, the company was able to meet its goal of 50% revenue...

E explains about future, while we are talking about something happened in the past.

My choice is A.
Director
Joined: 20 Jul 2004
Posts: 592

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22 Aug 2004, 00:19
Very good question. Agree with Krish on this; I also came up with A.

A) Sales of many of the company's older products were discontinued during the last year
>> this explains how M3 could acheive 50% despite no new products in the last year. Some of the reason for the anomoly could be - old products were discontinued (A), a new fast selling product was introduced 2 years ago, etc.
B) The company has introduced very few new products during the last 3 years
>> This does not explain the contrasting statements, rather questions the acheivement.
C) The company's single best-selling product was introduced more than 15 years ago
>> too old for context
D) Company spending on R&D has increased slightly over the past 5 years
>> Irrelavent
E) Scientists at the company report that they are close to breakthroughs that should result in several new products during the coming year
>> An explanation of last year's result is the question. Not to cnvince about future.
Senior Manager
Joined: 07 Oct 2003
Posts: 350
Location: Manhattan

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22 Aug 2004, 07:50
I think you're right guys. E makes references to the future, while A helps explain what had recently happened in the past. I let my inside knowledge of the company (I actually followed this co for a few years) screw up my thininking, if that's posisble...
GMAT Club Legend
Joined: 15 Dec 2003
Posts: 4288

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23 Aug 2004, 08:00
OA is A
Good explanation hwi. I thought this question was good and had a different feel.
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Paul

Director
Joined: 05 May 2004
Posts: 574
Location: San Jose, CA

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23 Aug 2004, 10:38
Agree with A
E may be correct, but in the current context it is out of scope
23 Aug 2004, 10:38
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