Executives of Company G receive high salaries and excellent benefits,

Question

Executives of Company G receive high salaries and excellent benefits, in addition to stock options and numerous other perks. However, a majority of shareholders of Company G have objected to paying for its executives to travel on Company G's corporate jets. These shareholders believe that these jets should only be used for purposes related to increasing the profits of Company G.

Which of the following must be true to support the reasoning behind the shareholders' objection?

A. Company G executives primarily use the corporate jets for personal travel.

B. Other perks provided to the executives of Company G are not directly related to the profitability of Company G.

C. Most companies pay significant amounts of money to lease corporate jets.

D. Executives of the vast majority of companies must pay for their own travel costs on corporate jets.

E. Company G has not been profitable for the past 3 years.

sudarshan22 · Answer

Pre-thinking :  
Although executives of Company G receive high salaries and excellent benefits, and numerous other perks, majority of shareholders of Company G have  objected  to paying for its executives to travel on Company G's corporate jets  because  the   shareholders believe that these jets should only be used for purposes related to increasing the profits of Company G. i.e official purpose.

A. Company G executives primarily use the corporate jets for personal travel. -->   Correct , matches our pre-thinking, personal travel does not qualify official purpose and does not add any value to the Company

Hence,   A  .

Mittali · Answer

A or E ?? 
A - Executives use for personal travel -supports stakeholders

E-Company is not profitable since 3 years .

abhinav770 · Answer

Perfect question to demonstrate the basic reasoning required to solve any assumption question.

Premise Executive receive high salaries, excellent benefits, stock options, numerous other perks. Numerous shareholders have an objection when these executives travel on company's corporate jets. However, these shareholders believe that these jets should  only  be used for purposes which increase profits for the company.
 Conclusion Shareholders don't want the executives to use company jets for anything but profit making.  
 Assumption When executives travel in company jets, they don't do it to bring profits to the company. Hence any answer choice supporting this hypothesis would not be wrong. We need to find the answer choice that sufficiently bridges the gap between the premise and the conclusion.

abhinav770 · Answer

Hey  Mittali !

Kindly allow me to explain.

The shareholders' objection to corporate jets is not sufficiently explained by answer choice (E). Moreover one cannot consider this as a "must be true" to explain the gap between the premise and the conclusion. I welcome you to go through  my detailed answer .

Cheers! :-D

anud33p · Answer

Technically speaking, this is an  Assumption  question. Not a "Must be true" question. Kindly change the tag.

CJWORK · Answer

Hi,
For choice A, what if the executive uses the jet for business trip that does not increase profit?

KrishnakumarKA1 · Answer

Here is how my understanding goes.

As long as the option doesn't clearly state a particular fact, then it is never advisable to assume something. Remember that the more stories you need to spin to make an option your answer, the more it is not your answer.

In Option A, it is clearly given that the purpose behind using the jets is "personal" - Hence it is not safe to assume that it is used for non-profitable business.

Also, the reason why Company G clearly prohibits people from using Corporate Jets is because they don't want the jets to be misused for personal reasons. Hence the answer.

Hope that helps.

Thanks,

Saikiran Dudyala.
Byju's GMAT Verbal Expert

Adambhau · Answer

Official Explanation

The shareholders' objection to paying for its executives to travel on Company G's corporate jets is based on the belief that the jets should only be used in ways that relate to increasing the company's profits. However, no information is provided about the purpose of the executives' travel when using the corporate jets. To support the shareholders' objection, it would be necessary to demonstrate that the executives' travel on corporate jets was NOT related to increasing the profits of Company G.

(A) CORRECT. The fact that Company G executives primarily use the corporate jets for personal travel, as opposed to some business purpose, demonstrates that the use of these jets is not related to the profitability of Company G. If this fact were not true, the logic behind the shareholders' objection would not hold.

(B) Information about other perks has no relevance to the shareholders' argument about corporate jet travel. The relative consistency or inconsistency of policies related to executive perks has no impact on the internal logic of the shareholders' argument about one specific perk – the use of corporate jets.

(C) The spending habits of "most companies" are not necessarily relevant to the spending habits of Company G. Even if one were to assume that Company G, like most companies, paid significant amounts of money to lease corporate jets, this provides no information about whether the use of these jets is related to increasing the company's profits.

(D) The policies of "the vast majority of companies" are not necessarily relevant to the policies of Company G. Moreover, this information provides no information about whether the use of Company G's corporate jets is related to increasing the company's profits.

(E) Company G's actual profitability (or lack thereof) has no bearing on the shareholders' argument. Whether the Company is profitable or not, the shareholders' objection is based on the belief that corporate jets should only be used in ways that attempt to increase the company's profits.

arushi118 · Answer

Correct answer is A: Because shareholders object only if the jets are being used for non-profit purposes, i.e., personal travel.

Executives of Company G receive high salaries and excellent benefits,

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Executives of Company G receive high salaries and excellent benefits,

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