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V01-06 [#permalink]

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New post 16 Sep 2014, 01:54
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E

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Question Stats:

71% (01:39) correct 29% (01:31) wrong based on 41 sessions

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The Housing law prohibits businesses from reimbursing any employees for the cost of owning and renting a luxurious apartment that is used for business purposes. Thus, many Canadian companies themselves purchase luxurious apartments. The vast majority of the business housing colonies are owned by small and mid-size businesses, and accommodations are strictly for business purposes, with mostly mid-level employees on board. These companies and their boards of directors are in full compliance with the law and with what is best for their businesses.

Which of the following can be most properly inferred from the statements above?


A. The Housing law of 1989 in question costs businesses money.
B. Most executives would rather use company owned luxurious apartments than use commercial luxury apartments.
C. Large businesses usually have their executives stay in semi-luxurious or ordinary commercial apartments.
D. Upper level executives are less often in compliance with the law.
E. By not receiving any reimbursement for these luxurious apartments, the mid-level executives on board are complying with the law.
[Reveal] Spoiler: OA

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Re V01-06 [#permalink]

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New post 16 Sep 2014, 01:54
Expert's post
Official Solution:


The Housing law prohibits businesses from reimbursing any employees for the cost of owning and renting a luxurious apartment that is used for business purposes. Thus, many Canadian companies themselves purchase luxurious apartments. The vast majority of the business housing colonies are owned by small and mid-size businesses, and accommodations are strictly for business purposes, with mostly mid-level employees on board. These companies and their boards of directors are in full compliance with the law and with what is best for their businesses.

Which of the following can be most properly inferred from the statements above?


A. The Housing law of 1989 in question costs businesses money.
B. Most executives would rather use company owned luxurious apartments than use commercial luxury apartments.
C. Large businesses usually have their executives stay in semi-luxurious or ordinary commercial apartments.
D. Upper level executives are less often in compliance with the law.
E. By not receiving any reimbursement for these luxurious apartments, the mid-level executives on board are complying with the law.


Situation:According to the statements, the companies that own luxurious apartments for business use are fully in compliance with the relevant law, which is summarized. A correct inference must follow from the premises given and must be true as per the stimulus.
    Choice A :
  1. It does not have to be true that the law costs the businesses money, as no evidence about the relative costs is given and the law in specific is nowhere mentioned
  2. Choice B : This choice is an irrelevant comparison, as the preferences of the executives are not the concern of the statements.
  3. Choice C : This choice does not have to follow, as there is no information given about the housing arrangements made by large companies. The statements only indicate that the majority of luxurious apartments are not owned by large companies.
  4. Choice D : There is no information given about the housing arrangements of upper level executives and no reason to believe that those with the companies discussed do not comply with their companies’
  5. Choice E : Correct. If, as the statements indicate, the companies are in full compliance with this law, it must be true that the executives following their guidelines also are.

Answer: E
_________________

New to the Math Forum?
Please read this: Ultimate GMAT Quantitative Megathread | All You Need for Quant | PLEASE READ AND FOLLOW: 12 Rules for Posting!!!

Resources:
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Collection of Questions:
PS: 1. Tough and Tricky questions; 2. Hard questions; 3. Hard questions part 2; 4. Standard deviation; 5. Tough Problem Solving Questions With Solutions; 6. Probability and Combinations Questions With Solutions; 7 Tough and tricky exponents and roots questions; 8 12 Easy Pieces (or not?); 9 Bakers' Dozen; 10 Algebra set. ,11 Mixed Questions, 12 Fresh Meat

DS: 1. DS tough questions; 2. DS tough questions part 2; 3. DS tough questions part 3; 4. DS Standard deviation; 5. Inequalities; 6. 700+ GMAT Data Sufficiency Questions With Explanations; 7 Tough and tricky exponents and roots questions; 8 The Discreet Charm of the DS; 9 Devil's Dozen!!!; 10 Number Properties set., 11 New DS set.


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Re: V01-06 [#permalink]

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New post 01 Aug 2016, 14:54
Read the question stem: Which of the following stipulations would be most helpful in assuring the success of the CEOs’ plan?
A Plan/Strategy question. We need to support/strengthen/assure the success of the plan.
What is the plan? - To provide more variety in accounting services, break up the Big Four firms.
We are looking for more variety.
I think most of you are fine with A, B and D not being the answer.
C says that the corporation should keep the same firm for audit but choose a new firm for non-audit. It has no relevance to the plan. The plan is to create variety. How the corporations will choose to use that variety is absolutely up to them.

Now, why is E the answer?
The Big Four firms should divide so that the audit and non-audit sections are not broken up.
This says that if one firm A, breaks up into two firms B and C, both B and C should have audit and non-audit sections. You should not split the audit and non audit sections. Now, if this happens, the corporations get even more variety.
Today corporations have 4 options for audit functions and 3 (after one firm is chosen) for non- audit functions.
Lets say if each of the 4 firms breaks into 2 firms, with audit going to one firm and non audit going to the other firm then options for audit services - 4, options for non audit services - 4
But if each of the 4 firms breaks into 2 such that each firm has both audit n non audit functions, then options for audit functions - 8, options for non audit functions - 7 (after a firm is chosen for audit).
Hence (E) assures the success of the plan of creating variety.
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Re: V01-06 [#permalink]

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New post 30 Mar 2018, 10:06
Bunuel wrote:
Official Solution:


The Housing law prohibits businesses from reimbursing any employees for the cost of owning and renting a luxurious apartment that is used for business purposes. Thus, many Canadian companies themselves purchase luxurious apartments. The vast majority of the business housing colonies are owned by small and mid-size businesses, and accommodations are strictly for business purposes, with mostly mid-level employees on board. These companies and their boards of directors are in full compliance with the law and with what is best for their businesses.

Which of the following can be most properly inferred from the statements above?


A. The Housing law of 1989 in question costs businesses money.
B. Most executives would rather use company owned luxurious apartments than use commercial luxury apartments.
C. Large businesses usually have their executives stay in semi-luxurious or ordinary commercial apartments.
D. Upper level executives are less often in compliance with the law.
E. By not receiving any reimbursement for these luxurious apartments, the mid-level executives on board are complying with the law.


Situation:According to the statements, the companies that own luxurious apartments for business use are fully in compliance with the relevant law, which is summarized. A correct inference must follow from the premises given and must be true as per the stimulus.
    Choice A :
  1. It does not have to be true that the law costs the businesses money, as no evidence about the relative costs is given and the law in specific is nowhere mentioned
  2. Choice B : This choice is an irrelevant comparison, as the preferences of the executives are not the concern of the statements.
  3. Choice C : This choice does not have to follow, as there is no information given about the housing arrangements made by large companies. The statements only indicate that the majority of luxurious apartments are not owned by large companies.
  4. Choice D : There is no information given about the housing arrangements of upper level executives and no reason to believe that those with the companies discussed do not comply with their companies’
  5. Choice E : Correct. If, as the statements indicate, the companies are in full compliance with this law, it must be true that the executives following their guidelines also are.

Answer: E


I am confused with the question language and official explanation. Can somebody provide a better explanation?
Re: V01-06   [#permalink] 30 Mar 2018, 10:06
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