HOT Competition 1 Sep/8AM: The owners of Hole-In-One Donuts, a combina

Question

The owners of Hole-In-One Donuts, a combination mini golf course and donut shop in the town of Sealett, recently decided to take a controversial political stand online. As a result, a number of people opposed to this political view have promised to boycott Hole-In-One until its owners issue an apology.

The answer to which of the following questions would be the LEAST useful in determining whether the ensuing controversy will be detrimental to Hole-In-One’s profits?

A. Whether a significant number of Hole-In-One’s pre-existing customers share the political views held by the boycotters.

B. Whether Hole-In-One’s owners considered the potential financial impacts of taking a controversial political stand before sharing their position online.

C. Whether Hole-In-One’s political stand will draw in enough new, like-minded customers to counterbalance any business lost to the boycott.

D. Whether comparable businesses in Sealett that have taken similar political stands have lost revenue as a result of sharing those positions.

E. Whether the controversy over Hole-In-One’s political stand will generate sufficient free publicity to allow Hole-In-One to cut its advertising budget by an amount that would exceed any revenue lost to the boycott.

Bunuel · Accepted Answer

Veritas Prep Explanation

The correct answer is B.

“Whether Hole-In-One’s owners considered the potential financial impacts of taking a controversial political stand before sharing their position online” is interesting, but it does not clearly bear on the potential financial impacts experienced by Hole-In-One Donuts.

Perhaps the owners considered these impacts but decided that they would be minor – the answer to “whether the ensuing controversy will be detrimental to Hole-In-One’s profits” might be “yes.” Or perhaps the owners considered, decided that the impacts would be majorly detrimental, but ultimately decided that the principle was more important than the money. Or perhaps the owners considered, decided that the impacts would be negligible, but were simply wrong. There is no reason to assume that the owners are infallible authorities when it comes to the impact that a political controversy might have on their company’s bottom line.

Then again, perhaps the owners considered, expected no negative impacts, and were correct – producing a “no” answer to the underlying question.

Or perhaps the owners didn’t consider the impacts at all, but again we know nothing about “whether the ensuing controversy will be detrimental to Hole-In-One’s profits.” The answer could still, just as easily, be “yes” or “no.”

It’s simply not possible to take B are solid evidence in any direction.

Answer A is relevant in a very direct way. If Hole-In-One’s customers share the boycotters’ views, then these customers may be more apt to join the boycott and thereby reduce Hole-In-One’s profits. If the customers do not share these views, and if, to our knowledge, only “people opposed to this political view” are going to boycott, then there is no clear reason to expect that these customers would join in and no reason to think that a boycott by people who presumably were not patrons of Hole-In-One to begin with would reduce Hole-In-One’s profits.

Answer C suggests a different way in which the boycott may or may not harm Hole-In-One’s profits. If enough new customers will be drawn to Hole-In-One in response to the political stand, then the net impact of the “ensuing controversy” should not be negative. Otherwise, we may expect that the controversy will indeed negatively impact Hole-In-One’s profits.

Answer D is circumstantial but still useful. If “comparable businesses in Sealett… have taken similar stands,” then their resulting experiences have some relevance to what we may expect will happen to Hole-In-One. If those other businesses lost revenue, then this suggests that boycotts may have been effective and/or that these views may be unpopular enough in Sealett to cause customers to go elsewhere (without bringing in sufficient new customers to compensate). If, instead, other businesses have not suffered adverse impacts on revenue, then it seems likelier that Hole-In-One will not suffer revenue – and thus profit – losses either.

Answer E offers another mechanism by which Hole-In-One may avoid adverse consequences. Even if the boycott has a negative impact on revenue, the question ultimately asks about “Hole-In-One’s profits.” If Hole-In-One reaps costs savings through reduced advertising expenditures in light of the free publicity, and if those cost savings outweigh any reductions in revenue, then Hole-In-One should not expect to suffer reduced profits. However, if the controversy does not enable Hole-In-One to cut costs by enough to counteract lost revenues, then we may expect that the controversy will cause Hole-In-One’s profits will decline.

sk7075 · Answer

The owners of Hole-In-One Donuts, a combination mini golf course and donut shop in the town of Sealett, recently decided to take a controversial political stand online. As a result, a number of people opposed to this political view have promised to boycott Hole-In-One until its owners issue an apology.

The answer to which of the following questions would be the LEAST useful in determining whether the ensuing controversy will be detrimental to Hole-In-One’s profits?

A. Whether a significant number of Hole-In-One’s pre-existing customers share the political views held by the boycotters.

Incorrect: If Yes, then it will lose customers and in turn money
 If No, then no effect

B. Whether Hole-In-One’s owners considered the potential financial impacts of taking a controversial political stand before sharing their position online.
Correct

C. Whether Hole-In-One’s political stand will draw in enough new, like-minded customers to counterbalance any business lost to the boycott.
Incorrect: If the number of customers is the same, then it will not lose money. If not, then will lose.

D. Whether comparable businesses in Sealett that have taken similar political stands have lost revenue as a result of sharing those positions.
Incorrect: If the same thing happens to the comparable business at the same place, then the same thing may affect the hotel in the same way

E. Whether the controversy over Hole-In-One’s political stand will generate sufficient free publicity to allow Hole-In-One to cut its advertising budget by an amount that would exceed any revenue lost to the boycott.
Incorrect: If cut in ad money exceeds any revenue lost, then the profit will not decline.

Posted from my mobile device

JonShukhrat · Answer

The owners of Hole-In-One Donuts, a combination mini golf course and donut shop in the town of Sealett, recently decided to take a controversial political stand online. As a result, a number of people opposed to this political view have promised to boycott Hole-In-One until its owners issue an apology.

The answer to which of the following questions would be the LEAST useful in determining whether the ensuing controversy will be detrimental to Hole-In-One’s profits?

A. Whether a significant number of Hole-In-One’s pre-existing customers share the political views held by the boycotters.

This choice is one the important factors that should be considered. Let’s say if 90% of customers share boycotters views, then most of them may easily switch to other shops. On the other hand, if they are simply 3%, then no worries.

B. Whether Hole-In-One’s owners considered the potential financial impacts of taking a controversial political stand before sharing their position online.

Yes, this step can be a calculated risk, if owners analyzed both plus and minus of the move. Yet, how we know that they are not wrong in their estimations? Note, that any remaining answer choices may cast doubt on this one. If owners thought that they are going to draw more attention and cut ad costs, but still failed to include all variables, then they can very well wrong. This choice gives no info as to whether owners’ move was detrimental to profits.

C. Whether Hole-In-One’s political stand will draw in enough new, like-minded customers to counterbalance any business lost to the boycott.

This choice heals the problem choice A introduces. Let’s say that some customers are going to join boycotters and thus some loss of profits may follow. However, if new likeminded customers are about to compensate boycotters, then the problem is solved.

D. Whether comparable businesses in Sealett that have taken similar political stands have lost revenue as a result of sharing those positions.

This choice may very well shed light on the inherent customer behavior in Sealett. I mean, people in one city are more alike than they are with the dwellers of other cities. It can be a case that the customers who left a comparable business can be a customer of Hole-in—One’s too. So, if these customers left one business that expressed controversial political stand, then they can leave another one for the same reason.

E. Whether the controversy over Hole-In-One’s political stand will generate sufficient free publicity to allow Hole-In-One to cut its advertising budget by an amount that would exceed any revenue lost to the boycott.

Marketers say that there is no bad advertisement, and any advertisement is a good one. Indeed, if some of the advertising expenses are cut or even larger margin, then surely this step is just a marketing step to allure more customers. This choice is important.

Hence  B

Posted from my mobile device

MayankSingh · Answer

IMO B

Argument  : 
 (i) A number of people opposed to the political view of Hole-In-One have promised to boycott it until its owners issue an apology.
(ii) Hole-In-One Donuts is a combination mini golf course and donut shop in the town of Sealett

The  answer  to which of the following questions would be the   LEAST useful in determining whether the ensuing controversy will be detrimental to Hole-In-One’s profits   ?

A.  Whether a significant number of Hole-In-One’s pre-existing customers share the political views held by the boycotters .  Incorrect   - 
   If Yes  - If a significant number of Hole-In-One’s pre-existing customers share the political views held by the boycotters, then customers will boycott Hole-In-One & their   revenue-profit will get affected . 
  If No  - If a significant number of Hole-In-One’s pre-existing customers  not share  the political views held by the boycotters, then customers will not boycott Hole-In-One & their   revenue-profit will not get affected . 
 #  This option  helps evaluate  whether the ensuing controversy will be detrimental to Hole-In-One’s profits, So is incorrect as required by question.

B.  Whether Hole-In-One’s owners considered the potential financial impacts of taking a controversial political stand before sharing their position online.  -   Correct   -
 Even if the owner has considered the potential financial impact of taking a controversial political stand before sharing their position online. it may not be possible to determine whether the stand will be detrimental to profit or not. This option adds lest to help identify the outcome of taking the stand & so not help to evaluate controversy will be detrimental to Hole-In-One’s profits.

C.  Whether Hole-In-One’s political stand will draw in enough new, like-minded customers to counterbalance any business lost to the boycott.    Incorrect   - 
   If Yes:   Hole-In-One’s political stand will draw in enough new, like-minded customers to counterbalance any business lost to the boycott.- In this case there will be no loss in business & thereby   profit will not get affected  .
  If No:   Hole-In-One’s political stand  will not  draw in enough new, like-minded customers to counterbalance any business lost to the boycott- In this case, there will be a net decrease in customers, resulting in   decrease in business & profit . 
 #  This option  helps evaluate  whether the ensuing controversy will be detrimental to Hole-In-One’s profits, So is incorrect as required by question.

D.  Whether comparable businesses in Sealett that have taken similar political stands have lost revenue as a result of sharing those positions .   Incorrect   - 
   If Yes:   Comparable businesses in Sealett that have taken similar political stands have lost revenue as a result of sharing those positions: In that case, its very likely that the case may be repeated & Hole-In-One face may loss revenue & thereby   profit decrease  .
  If No:   Comparable businesses in Sealett that have taken similar political stands  have not  lost revenue as a result of sharing those positions: In that case, its very likely that the case may be repeated & Hole-In-One face maynot loss revenue & thereby   profit will not get affected  .
 #  This option  helps evaluate  whether the ensuing controversy will be detrimental to Hole-In-One’s profits, So is incorrect as required by question.

E.  Whether the controversy over Hole-In-One’s political stand will generate sufficient free publicity to allow Hole-In-One to cut its advertising budget by an amount that would exceed any revenue lost to the boycott.    Incorrect   -
   If Yes  : If the controversy generate sufficient free publicity to allow Hole-In-One to cut its advertising budget by an amount that would exceed any revenue lost to the boycott- In that case, there won't be a decrease in profit as revenue lost is compensated by saving on advertising.   This will not affect the profit  .
  If No :  if controversy doesn't cut advertising budget by an amount equal to revenue lost, then there will be a revenue loss, which will   result in profit decrease . 
 #  This option  helps evaluate  whether the ensuing controversy will be detrimental to Hole-In-One’s profits, So is incorrect as required by question.

Posted from my mobile device

BenjaminS · Answer

Evaluation Question. 
Let me analyze this argument.
 Question stems:  which of the following questions would be the LEAST useful in determining whether the ensuing controversy will be detrimental to Hole-In-One’s profits
 Premise:  
- The owners of Hole-In-One Donuts, a combination mini golf course and donut shop in the town of Sealett, recently decided to take a controversial political stand online. 
- As a result, a number of people opposed to this political view have promised to boycott Hole-In-One until its owners issue an apology.
 Conclusion: 
the ensuing controversy will be detrimental to Hole-In-One’s profits.

Pre-thinking:  We desire to find the answer choices that would be the least useful to evaluate this stimulus.

Process of elimination. 
 
 It makes an impact on the profit because if a significant number of pre-existing customers share the political views, owners are more likely to have more customers who are pre-existing. Out.

Even though Hole-In-One’s owners considered the potential financial impacts of taking a controversial political stand, the actual may occur or not. So It seems be the least useful to evaluate the conclusion. 
Keep it.

It helps to evaluate the conclusion. Out.

If the comparable business lost revenue as a result of sharing those positions, Hole-In-One’s owners may lose the revenue also. Out.

If there are other budgets to support any revenue lost to the boycott, the profit still remains. Out.

Therefore, I choose B.

Posted from my mobile device

RutujaDeshmukh19 · Answer

Let us break down the argument and understand it in a better way:

The owners of Hole-In-One Donuts (HIOD), a combination mini golf course and donut shop in the town of Sealett, recently decided to take a controversial political stand online.  
 
 HIOD is Mini Golf course + Donuts 
 The owners of HIOD recently decided to take a controversial political stand online.

As a result, a number of people opposed to this political view have promised to boycott Hole-In-One until its owners issue an apology. 
 
 A number of people opposed to this view and have promised to boycott HIOD until its owners give an apology for the statement given.  
We need to select an answer which impacts HIOD's profits when the evaluated with both the scenarios for a particular option choice..

(A) Whether a significant number of Hole-In-One’s pre-existing customers share the political views held by the boycotters. - Inorrect  
 
 If YES -->> Then there would be no impact on the profits of HIOD. 
 If NO -->> Then there would be decline in the profits.

(B) Whether Hole-In-One’s owners considered the potential financial impacts of taking a controversial political stand before sharing their position online. - Correct 
 
 If YES -->> There is a possibility that the potential financial impact may be under-predicted and HIOD would have to face more loss than predicted. 
 If NO -->> There is a high possibility that there would be a financial impact and HIOD is not ready for the same. 
 There would be no different impact in either of the above situations.

(C) Whether Hole-In-One’s political stand will draw in enough new, like-minded customers to counterbalance any business lost to the boycott. - Inorrect 
 
 If YES -->> The business lost due to the boycott will be offsetted by the enough new like-minded customers. This will increase the profits of HIOD or at least hold it stable. 
 If NO -->> Then there will be a decline in the profits. Thus the profits of HIOD will be affected.

(D) Whether comparable businesses in Sealett that have taken similar political stands have lost revenue as a result of sharing those positions. - Inorrect 
 
 If YES -->> Then there is a high chance that people who are against the same claims may also be against for the claims by HIOD. Thus it would affect HIOD's profits. 
 If NO -->> Then HIOD's profits would not decline.

(E) Whether the controversy over Hole-In-One’s political stand will generate sufficient free publicity to allow Hole-In-One to cut its advertising budget by an amount that would exceed any revenue lost to the boycott. - Inorrect  
 
 If YES -->> Then it is a win-win situation for HIOD and HIOD's profits won't be affected. 
 If NO -->> Then advertising budget won't be offsetted by the revenue lost to the boycott. This would reduce the profits by HIOD.

KushagraKirtiman · Answer

A poor quality question, You are saying option D is circumstantial evidence but another line of thought can also go like this. Maybe the Hole in one donut company is very popular outlet in the area while the other are mostly small businesses compared to it, so what happend with a small business cannot happen with supposedly big business like Hole in one donut. For example a small takeway would suffer more for taking a political stand compared to big businesses like Dominos etc.

While B sounds much better to take into account. Maybe the owner already took into account the losses if they incur due to such campaigns and based on thier reseaarch went forward with plan

VerbalBot · Answer

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HOT Competition 1 Sep/8AM: The owners of Hole-In-One Donuts, a combina

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