An electric-power company gained greater profits and provided electric

Question

An electric-power company gained greater profits and provided electricity to consumers at lower rates per unit of electricity by building larger-capacity more efficient plants and by stimulating greater use of electricity within its area. To continue these financial trends, the company planned to replace an old plant by a plant with triple the capacity of its largest plant.

The company's plan as described above assumed each of the following EXCEPT:

A. Demand for electricity within the company's area of service would increase in the future.

B. Expenses would not rise beyond the level that could be compensated for by efficiency or volume of operation, or both.

C. The planned plant would be sufficiently reliable in service to contribute a net financial benefit to the company as a whole.

D. Safety measures to be instituted for the new plant would be the same as those for the plant it would replace.

E. The tripling of capacity would not result in insuperable technological obstacles to efficiency.

dentobizz · Accepted Answer

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Ravshonbek · Answer

everything here is related to efficiency and profit i guess.

A. is def. a valid assumption
B. peak of the expenses is known to them so they think it can be compensated thus they can go ahead with the project
C. valid
D. no relation to profit
E. valid

D for me

pramendrapandeya · Answer

If you look at beginning of sentence, "greater profits and provided electricity to consumers at lower rates per unit of electricity by building larger-capacity more efficient plants and by stimulating greater use of electricity within its area. "

They have two concerns : 1. Greater profits 2. Efficiency

D is option which is talking about 'security' not related to profits or efficiency so D is correct option

Sr1994 · Answer

Here, we have to find an answer which is actually not an assumption. Why? 
Because, if we see the question stem, it uses a word "EXCEPT". 
So, what we have got here are 5 assumptions out of which 1 does not help us to fill the gap between the conclusion and the premises.

Analyzing the options here,
A. This is a valid assumption. Why? Because if the demand for electricity does not increase, then there won't be any increase in the profit. So, it is required that the demand for electricity increase.   Wrong  
B. This is a valid assumption. Why? Because if the expenses rise above the level that could be compensated by the efficiency or volume of operation, or both, then the profit that is obtained will go down. So, we have to assume that the expenses does not rise above a certain level.   Wrong   
C. This is a valid assumption. Why? Because this option talks about adding more benefits to the company as a whole and that should be a valid assumption.   Wrong  
D. This is not a valid assumption. We are really concerned about the profit that we can get from the new plant. So, we don't actually need to assume anything about the safety measures. Since we are looking for an option which is not an assumption that is required, this option is the correct answer.   Correct   
E. This is a valid assumption. Why? because if tripling the capacity would take a toll on the efficiency, then we cannot increase the profit. So, it is required that no issue affects the efficiency of the plant.   Wrong

MBAB123 · Answer

Hey  Aezon 
A is incorrect as it is an important assumption. Imagine this scenario, the company triples the capacity of its plant, but the demand for electricity remains the same. What would the company even do with all the extra electricity? If they can't sell it, they certainly won't be able to increase their profit.

Hence, A is needed for the argument to be logical. If this doesn't help, I'd like to hear why you think A is correct and also why D is incorrect as that might make this discussion more fruitful.

mSKR · Answer

I rejected A because i could see " building larger-capacity " in the argument. Why the company would would go for larger capacity ? The basic assumption is that they may server more consumers.

When I tried to look for safety measures in the argument, i couldn't find even a hint. Then the questions came in mind, what if security measures are not same? I didn't have anything to say based on the given statements.

For others statements, at least i had some points to argue. For D , I was answerless.

Don't you agree?

I hope it helps.

BLTN · Answer

Hey, mSKR

I presume that Aezon tried to find a "real" assumption in lieu of a wrong one. In that case, answer "A" deems more obvious and logical. Except's question type can be entangled

nikitathegreat · Answer

GMATNinja , @VeritasKarishma - Is option D incorrect because the same is not necessary condition?
We can install plant with either the same safety or with increased safety and hence option D is not an assumption. 
Please correct my understanding

GMATNinja · Answer

You're correct that the information in (D) isn't necessary! The goal is to continue the trend of great profits. As you've noted, the safety measures could be the same or could be different -- we have no idea how that would affect the profits of the new plant.

I hope that helps!

PatrickShort · Answer

The company's plan assumes each of the following EXCEPT:

D. Safety measures to be instituted for the new plant would be the same as those for the plant it would replace.

VerbalBot · Answer

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An electric-power company gained greater profits and provided electric

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