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nikhil.jones.s
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Joined: 06 May 2013
Last visit: 29 Dec 2018
Posts: 75
Given Kudos: 25
Location: Malawi
Concentration: Marketing, Technology
Schools: Tuck '20 (S)
GMAT 1: 730 Q49 V40
GMAT 2: 760 Q50 V42
GPA: 3
WE:Consulting (Non-Profit and Government)
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Updated on: 23 Jan 2019, 05:53
Originally posted by nikhil.jones.s on 11 Jul 2013, 01:13.
Last edited by Bunuel on 23 Jan 2019, 05:53, edited 1 time in total.
Last edited by Bunuel on 23 Jan 2019, 05:53, edited 1 time in total.
Renamed the topic and edited the question.
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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
(medium)
Question Stats:
74% (01:40) correct
26%
(01:52)
wrong
based on 388
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Not Attempted Yet
Since Arlene Hodges was installed as president of the Caralis corporation, profits have increased by an average of 11 percent per year. During the tenure of her predecessor, the corporation’s profits averaged a yearly increase of only 7 percent. Obviously Ms. Hodges’ aggressive marketing efforts have caused the acceleration in the growth of Caralis’ profits.
Which of the following, if true, would most weaken the conclusion drawn above?
(A) The corporation’s new manufacturing plant, constructed in the past year, has resulted in a 15 percent increase in production capacity.
(B) For each year of Ms. Hodges’ presidency, the corporation’s financial records show an increase in profits over the previous year.
(C) During the tenure of Ms. Hodges’ predecessor, the corporation began an advertising campaign aimed at capturing consumers between the ages of 24 and 35.
(D) Since Ms. Hodges became president, the corporation has switched the primary focus of its advertising from print ads to radio and television commercials.
(E) Just before he was replaced, Ms. Hodges’ predecessor directed the acquisition of a rival corporation, which has nearly doubled the corporation’s yearly revenues.
Which of the following, if true, would most weaken the conclusion drawn above?
(A) The corporation’s new manufacturing plant, constructed in the past year, has resulted in a 15 percent increase in production capacity.
(B) For each year of Ms. Hodges’ presidency, the corporation’s financial records show an increase in profits over the previous year.
(C) During the tenure of Ms. Hodges’ predecessor, the corporation began an advertising campaign aimed at capturing consumers between the ages of 24 and 35.
(D) Since Ms. Hodges became president, the corporation has switched the primary focus of its advertising from print ads to radio and television commercials.
(E) Just before he was replaced, Ms. Hodges’ predecessor directed the acquisition of a rival corporation, which has nearly doubled the corporation’s yearly revenues.
11 Jul 2013, 01:31
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nikhil.jones.s
When you read an argument like this, the first thing you should do is question the author's logic. Hodges' predecessor saw 7% increase in profit, Hodges is seeing 11%. The reasons for this could be many. The argument states that Hodges' aggressive marketing efforts have caused this increase. But no facts are provided to back this claim. Hence, to weaken this argument, all we need is another reason which led to the increase in profits.
(A) tells you that capacity increased. It doesn't tell you that demand (and hence revenue) increased.
(C) doesn't say what effect the campaign had. Did it rob the company of a lot of money and hence reduced profits. Did it lead to a delayed effect and hence a major increase in revenue, we don't know. We can only speculate and hence this is not a good answer.
(D) doesn't tell us that radio and tv ads are better and capture more audience. Again, the effect is onyl speculation.
(E) tells us that just when Mr. Hodges took over, they had acquired a rival which had doubled the revenues. This gives us a direct impact on the top line by something other than Hodges' marketing activities. Hence, this might be the reason of increased profits. Mind you, we are only given that revenues increased, we d on't know anything about the costs and hence can't say for sure that profits increased. This option only makes us doubt the conclusion, not prove it wrong.
But nevertheless it does weaken it. Hence it is the best among the choices.
Answer (E)
nikhil.jones.s
Retired Thread Master
Joined: 06 May 2013
Last visit: 29 Dec 2018
Posts: 75
Own Kudos:
Given Kudos: 25
Location: Malawi
Concentration: Marketing, Technology
Schools: Tuck '20 (S)
GMAT 1: 730 Q49 V40
GMAT 2: 760 Q50 V42
GPA: 3
WE:Consulting (Non-Profit and Government)
Products:
11 Jul 2013, 02:08
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VeritasPrepKarishma
Hi Karishma, Thanks a lot for the brilliant explanation. But my doubt here is basically between A and E.
If we pick out A, we are assuming that an increase in production lead to an increase in profits.
If we pick out E, we are assuming that an increase in revenue lead to an increase in profits.
Isn't it true that both mildy weaken the conclusion? If not, can you tell me where am I going wrong? I know one mistake that i'm commiting here is that the question does not mention the time when the president was replaced. Hence, the increase in production last year might have occurred well within the tenure of the new president. Apart from this trivial discrepancy, are there any fundamental flaws in option A?
