The city of Goshorn has a substantial problem with its budgeting

Question

The city of Goshorn has a substantial problem with its budgeting process for public works projects. Last year’s Sullivan Park expansion ran nearly 50% over budget, for example, and the city has gone from running an annual budget surplus for nearly two decades straight to now facing prohibitive budget deficits.

Which of the following, if true, most strengthens the argument that Goshorn has a substantial problem with its budgeting process?

A) The Sullivan Park expansion project featured the smallest cost-above-budget percentage of all Goshorn’s public works projects.
B) Goshorn’s budgeting process for public works has not been updated in nearly 20 years.
C) A new hiking and jogging trail in Goshorn cost more than twice as much to construct as did a similar project completed just ten years earlier.
D) Goshorn’s revenue from property taxes has decreased markedly since the height of the real estate boom five years earlier.
E) The city of Goshorn does not receive any federal or state funding for its public works projects, although several nearby cities do.

arhumsid · Accepted Answer

You have 1000 Rs. You plan to treat 3 of your friends. (remember, you only have 1000, nothing more) You plan your budget: You select a reasonable restaurant (remember you only have 1000 Rs) You pre-decide the menu, based on the itemized prices (remember you only have 1000 Rs) You invite the friends who eat the least (remember you only have 1000 Rs) You arrange for a cheap cab (remember you only have 1000 Rs) etc (remember you only have 1000 Rs) Finally on the d-day, you guys finished eating and ordered for the check.. and BAM! it's Rs 3500 (inclusive of all taxes) !!

What went wrong? - Your planning How can we strengthen that? - This is nothing! You have made even bigger blunders in past. (Choice A) What is irrelevant? - You dont get any pocket money from your Dad while most of your friends do. (Choice E) Hope that helps :lol:

pacifist85 · Answer

I chose A because if "the Sullivan Park expansion project featured the smallest  cost- above-budget   percentage of all Goshorn’s public works projects", then adding up all of the costs, there is apparently a problem keeping up with the budget.

KS15 · Answer

+1 for A. If S' park budget above cost figure(50%) is the smallest of all the projects, then the other projects are running more than 50% above cost and that is a serious issue.

vinnisatija · Answer

I was confused between A and E. Can anyone explain how can we eliminate E?

Harley1980 · Answer

Hello  vinnisatija

Conclusion of argument:
"The city of Goshorn has a substantial problem with its budgeting process"
Why? Because: 
"Last year’s Sullivan Park expansion ran nearly 50% over budget, for example, and the city has gone from running an annual budget surplus for nearly two decades"

But why argument says that this is  substantial  problem?
What if Sullivan park is the only one problem of budget? What if city has a surplus for twenty years but this is 1% surplus?

We need to find answer that will confirm that surplus is big or that there is present other objects that have problems with budget.

A says that: 
"The Sullivan Park expansion project featured the  smallest  cost-above-budget percentage of all Goshorn’s public works projects."
So we received approvement that Sullivan is not one problem of the budget and that other objects have much bigger problems.

And answer E says that 
"The city of Goshorn does not receive any federal or state funding for its public works projects, although several nearby cities do."

We know that Goshorn does not received external funding but this does not give us answers to above mentioned questions about how big is Sullivan and how big are surplaces.

akadmin · Answer

Why not B. It clearly support that the budgeting is not updated and hence flawed

b9n920 · Answer

Something is not updated in 20 yrs does not necessarily mean that it is flawed. What if the Sullivan park is the only example of 50% over-budget, rest all projects completed within 0.5% surplus budget estimation? Does the conclusion still hold true?

Thanks.

sa2222 · Answer

The city of Goshorn has a substantial problem with its budgeting process for public works projects. Last year’s Sullivan Park expansion ran nearly 50% over budget, for example, and the city has gone from running an annual budget surplus for nearly two decades straight to now facing prohibitive budget deficits.

Which of the following, if true, most strengthens the argument that Goshorn has a substantial problem with its budgeting process?

A) The Sullivan Park expansion project featured the smallest cost-above-budget percentage of all Goshorn’s public works projects.
B) Goshorn’s budgeting process for public works has not been updated in nearly 20 years.
C) A new hiking and jogging trail in Goshorn cost more than twice as much to construct as did a similar project completed just ten years earlier.
D) Goshorn’s revenue from property taxes has decreased markedly since the height of the real estate boom five years earlier.
E) The city of Goshorn does not receive any federal or state funding for its public works projects, although several nearby cities do.

**************************************
Argument - City has problem with its budgeting for public works projects. 
Why - Last year SP project was 50% over budget. OK. 
Another statement - City has gone from running an annual budget surplus for 2 decades (20 years) to NOW facing budget deficits (More Spending, Less Money). 
So, city is NOW facing budget deficit, but until NOW it was doing good with Budget Surplus (Less spending, more Money)

A - If this contributed as the smallest over budget project, then there are more over budget projects contributing higher percentage. Thus, supports that Now we are really facing some issue. 
B - Not been updated for 20 years, but for 2 decades city has budget surplus. NON-ISSUE. 
C- This doesn't make sense, what would have cost $1 10 years ago, could cost $100 now. NON-ISSUE. 
D- Revenue decreased 5 years ago, but we are facing the issue now. Until now we were in good shape. NON-ISSUE. 
E - This must be true for last 20 years as well. If so, we were good until now. NON-ISSUE.

aragonn · Answer

Hi Expert,

I got confused between A and E. Can someone help, My explanation is given below.

So we need to find out choice that justify the flaw in budgeting of city. 
A - This choice suggests that every/most public project spending is going beyond it's budget. let just say budget was 100. P and Q were two projects, each with a budget of 20, while spending 30 each. still i left with 40. What my point is that we need more information to conclude that this is a flaw in budgeting.

E - Well if there is no budget then there is nothing. you can't run a project without budget.

I think both of these choices can be answers, but as we need to select one, i would like to go with E. Please help.

GMATNinjaTwo · Answer

Hi  aragonn ,

Choice E does not imply that there is  no budget ; it simply says that the city does not receive any  federal or state funding  for its public works projects. It is certainly possible that Goshorn has several other sources of funding for its public works projects (ie city taxes, revenue from use of city-owned facilities like parking lots or parks, revenue from tickets for traffic violations, etc).

As for choice A, we know that the Sullivan Park project was 50% over budget, but we do not know whether other public works projects were over budget and, if so, by how much. Choice A tells us that every other public works project was over budget by  more than  50% percent, since "the Sullivan Park expansion project featured the  smallest  cost-above-budget percentage of all Goshorn’s public works projects." This means that every single public works project in Goshorn was over budget by 50% or more, certainly supporting "the argument that Goshorn has a substantial problem with its budgeting process."

techiesam · Answer

Its a straight A .If we plot an imaginary graph of all the citys projects as in the pic enclosed herewith,Then we will see that most of its projects are over budget and among those over budget programms,The park project is least.That means all the other project are probably 60,70% over budget.That means it has a wrong budget planning.

Bunuel · Answer

VERITAS PREP OFFICIAL SOLUTION:

Consider the flaw in the given argument: the conclusion is broad, that the city has a substantial problem with its overall budgeting process, but the major premise is quite limited. You only know about one project that went above budget. This is a generalization issue: one over-budget project does not allow you to conclude that it's a systemic issue. But then take choice a into consideration: if A is true, and that one over-budget project is actually the city's best job of budgeting, then clearly there is a major problem. Choice A shows that the single data point is part of a larger problem and not just an outlier, so choice A is correct.

miteshchauhan · Answer

The Option (E) gives info about the lack of funding, but it doesn't explain in any way, how it can contribute to improving budget processing of the city

Dharmilshah · Answer

KarishmaB 
I chose B because the budget was not changed in 20 years which clearly indicates that there is a budgeting problem. Please explain why is this wrong?

shekharzzz5 · Answer

Argument - City has problem with its budgeting for public works projects.
Why - Last year SP project was 50% over budget. OK.
Another statement - City has gone from running an annual budget surplus for 2 decades (20 years) to NOW facing budget deficits (More Spending, Less Money).
So, city is NOW facing budget deficit, but until NOW it was doing good with Budget Surplus (Less spending, more Money)

A - If this contributed as the smallest over budget project, then there are more over budget projects contributing higher percentage. Thus, supports that Now we are really facing some issue.
B - Not been updated for 20 years, but for 2 decades city has budget surplus. out
C- This doesn't make sense, what would have cost $1 10 years ago, could cost $100 now. out
D- Revenue decreased 5 years ago, but we are facing the issue now. Until now we were in good shape.out
E - This must be true for last 20 years as well. If so, we were good until now. out

VerbalBot · Answer

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The city of Goshorn has a substantial problem with its budgeting

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