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According to the latest financial figures, the Cyclic Corporation's profits for the third quarter are up 20% from the same period a year ago.
Which of the following, if true, would provide the most support for concluding from the financial figures described above that overall profits for the corporation have increased from last year?
a) This year's profits from the second quarter are also up 20% from the same period a year ago.
b) Last year, the profits came mainly from the Kool division whereas this year profits are coming mainly from the Frieze Division.
c) At the Cyclic Corporation, the third quarter is consistently a very good indicator of profits in the first, second, and fourth quarters.
d) In previous years, the third quarter has consistently been the most profitable of the year.
e) This year, the dividend paid to shareholders has been increased by 2 cents a share over last year
Which of the following, if true, would provide the most support for concluding from the financial figures described above that overall profits for the corporation have increased from last year?
a) This year's profits from the second quarter are also up 20% from the same period a year ago.
b) Last year, the profits came mainly from the Kool division whereas this year profits are coming mainly from the Frieze Division.
c) At the Cyclic Corporation, the third quarter is consistently a very good indicator of profits in the first, second, and fourth quarters.
d) In previous years, the third quarter has consistently been the most profitable of the year.
e) This year, the dividend paid to shareholders has been increased by 2 cents a share over last year
08 Dec 2018, 03:03
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aragonn
What we have:- Profits for the third quarter this year are up by 20% than the profits for the third quarter last year.
What we need:- Overall profits for the whole year has increased than for the last year.
Let's analyze all the statements one by one.
1) Gives information about only the second quarter, no information about 1st and 4th quarter. Eliminated.
2) Irrelevant and Out of Scope because nothing hints about the difference between Frieze Division and Kool Division. Eliminated.
3) If the third quarter is indicative of first, second and fourth quarter, it implies that overall, all quarters have an increase in profits leading to an increase in profit for the whole year. Let's keep it.
4) Tempting. Though it states that 3rd quarter in the most profitable. It produces no data for the 1st, 2nd and 4th quarter. Maybe, the loss in other quarters in more than the profit in the third, which means overall profit may or may not has increased. Eliminated.
5) Since dividends have increased by 2 cents per share, that means overall profits have increased. Since companies usually give out dividend out of profits. Let's Keep it.
So, 1,2 and 4 are eliminated. Let's look over 3 and 5 again. 3 presents a picture which depends on the argument stated whereas 5 could have an outcome in itself with no relation to the argument presented. Stating only 5 in itself could establish the intended result in the question for regardless of whether the third quarter profit has increased or not, higher dividend means higher profit. But that's an assumption we made. Maybe, higher dividends are being for some other reason.
Summarising, IMO, option 3 seems a good fit.
