The costs we have incurred to develop a smartphone application for our

Question

The costs we have incurred to develop a smartphone application for our company's Qoop product has far exceeded the costs to develop our web platform and the mobile-friendly version of our website. The returns, thus far, do not even come close to recouping our initial investment. We should cap next year's marketing budget for Qoop at $100K. If user adoption for Qoop does not increase to a level that would result in conversion in sales that would, in 2-3 years, result in a modest profit, we should stop the project, cut our losses, and focus on developing another product.Our innovative application still hasn't gained attention from media. As with all types of product launches these days, we need to get the word out fast and get this product to go viral. I recommend a marketing budget closer to $400K. This will allow us to use some big name celebrities to help us get the word out on television, in magazines, and even through social networks like Facebook and Twitter. Once we get over the hump, further expense will be neglible as marketing will be largely free and will occur through word of mouth. Without strong celebrity promotion from the very beginning, the product launch will fizzle away and die unspectacularly - we'll never recoup our largest product development cost. For anything to go viral, it must have a cool factor, be funny, and be useful. A big name celebrity can help us get over that hump.Qoop helps complement our existing product offering. While Qoop expenses have been our largest product development cost, the cost should also be shared among the low costs of our other products. In addition, no product should be looked at as a standalone product. It's more important for us to grow our market share and gain competitive advantage in our industry. To do this, we have to launch more products and start generating a portfolio of products to match our big competitors. We should be marketing all of our products alongside Qoop and not just pigeonhole ourselves to promoting just one product whenever we access the TV or social media marketing channels.

DhruvBadaya · Accepted Answer

This is Critical Reasoning. You do not have to select the correct answer. You have to select the best answer. Now, note that everything after  not necessarily  does not count because it can be true or can be false. It is there just to confuse you. So, ignore everything after  not necessarily.  Now, try this RC again.

j4jeet · Answer

As you read the conversation.. CEO says that  "The costs we have incurred to develop a smartphone application for our company's Qoop product has far exceeded the costs to develop our web platform and the mobile-friendly version of our website"

And in the last tab CEO says that " we have to launch more products and start generating a portfolio of products to match our big competitors"

So we can infer that the app they made was too costly but they had necessary developers to develop other stuff too..

Hope you get the point!

Its tough to explain..

maikikiuu · Answer

If C is the right choice, one must make the assumption that product launch = more developers (C); if so, one could also assume that launch of product = need more fund to develop a product (A). An option requires additional but not universally-accepted assumption(s) is not likely the correct answer of GMAT.

Blackcrow1972 · Answer

Let's carefully analyze A:

A: "The company has enough funds for development on a new product."
Why it might seem correct:
The CEO mentions that Qoop complements the company's existing product offering and emphasizes building a portfolio of products to grow market share. This could imply that the company might be willing to invest in new products.
The CFO, while critical of Qoop's current performance, does not explicitly say the company lacks funds. Instead, they focus on capping the marketing budget and reevaluating Qoop’s future.
Why it is incorrect:
No direct evidence about available funds:

None of the statements explicitly confirm or imply that the company has enough funds for a new product.
While the CEO supports a long-term strategy of launching more products, this reflects a strategic priority, not a guarantee of financial capacity to fund new development.
Focus on Qoop's costs:

The CFO highlights that Qoop's development costs have been very high, and they even suggest potentially cutting losses if it doesn’t perform better. This implies financial caution rather than confidence in funding new development.
The question is about developers' views:

A doesn't relate to developers’ perspectives. There’s no evidence in the document that developers are concerned about the company’s ability to fund new projects. It focuses on financial considerations rather than developer-specific insights.

KarishmaB · Answer

Option (C) is tricky but correct. 
We are given in multiple tabs that Qoop development was the most expensive as per top executives. The developers of Qoop are also likely to agree to this.

(C) It has taken more financial resources, but not necessarily more developers, to create Qoop than to create the company's other products.

"But  not necessarily more developers" means that no statement can be made about the number of developers used.  
 So it is like a Qoop developer saying, "I know that Qoop was the most expensive one to develop, but I don't know whether it needed more developers to develop too."

Most expensive - given to be true in the tabs 
 More developers - nothing mentioned 
 That is why it works.

Utkarsha20 · Answer

Why I feel A is wrong is because we have no idea when the CEO is planning to expand the number of products in their portfolio. It could be immediately then in that case they have funds or it could be sometime in future. Which may imply that they currently do not have money but they plan on getting funds somehow (either through increasing revenue or through borrowings).
 So A is not the correct option here

Usernamevisible · Answer

Hi experts, I need help with option A and B

1. Based on the statements, which one of the following can be most reasonably be inferred to be a view held by the company's Qoop developers?

The company has enough funds for development on a new product.
> from 1at tab, last line we get - If user adoption for Qoop does not increase to a level that would result in conversion in sales that would, in 2-3 years, result in a modest profit, we should stop the project, cut our losses, and "focus on developing another product".

When CEO says new product, doesn't it mean they have enough financial resources and hence when CEO says go develop product to developer, they will automatically know that company has enough funds?

As the adoption of Qoop grows with the company's marketing efforts, more development resources are needed to position the product to scale.

>> The returns, thus far, do not even come close to recouping our initial investment. We should cap next year's marketing budget for Qoop at $100K. If user adoption for Qoop does not increase to a level that would result in conversion in sales that would, in 2-3 years, result in a modest profit, we should stop the project, cut our losses

When CEO says "stop the project" it means project is not fully developed as yet, doesn;t that mean if demand increases more development resources are needed to position the product to scale (as option B says)

Bunuel · Answer

For A , the inference goes too far.

The CFO says that if Qoop does not improve, the company should stop the project, cut its losses, and focus on developing another product. That is a conditional recommendation about what the company should do later. It does not mean the company already has enough funds for a new product.

A company can “focus on developing another product” by redirecting existing resources, reducing spending elsewhere, seeking more funding, or choosing a cheaper product. So developers could not reasonably infer that the company has enough funds just from that statement.

For B , “stop the project” does not mean the product is not fully developed.

Here, “project” means the business/product initiative as a whole. The issue is not that the app still needs more development; the issue is that adoption and sales conversion are not high enough to justify the investment. Nothing in the statements says that if adoption increases, more development resources will be needed to scale the product.

Option B adds a new technical assumption about scaling. That may be possible in real life, but it is not supported by the statements.

So A and B are both unsupported. C is better because the statements directly support the idea that Qoop took more financial resources to develop, while nothing says it required more developers.

The costs we have incurred to develop a smartphone application for our

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	The company has enough funds for development on a new product.
	As the adoption of Qoop grows with the company's marketing efforts, more development resources are needed to position the product to scale.
	It has taken more financial resources, but not necessarily more developers, to create Qoop than to create the company's other products.
	Developers can do a better job to gain user adoption for the smartphone application than can marketers with no technical knowledge.
	Marketing has turned 2.0; it is technical marketers who are experienced in programming that are needed to help spread the word throughout the web, not traditional marketers.

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The costs we have incurred to develop a smartphone application for our

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