The Bluewater Hotel usually earns half its yearly revenue during the

Question

Which of the following most logically completes the argument?

The Bluewater Hotel usually earns half its yearly revenue during the year’s first quarter, when typically all its rooms are occupied. At other times of the year it has many vacancies. This year the Bluewater was closed throughout the first quarter while damage caused by a severe storm at the end of last year was repaired. Nevertheless, the Bluewater is unlikely to see this year’s revenue drop to half of a normal year’s revenue, since __________.

(A) the closure this year will not affect its revenue next year, provided the Bluewater is open during next year’s first quarter
(B) few of the other hotels in the region were forced to close for repairs after the storm
(C) the cost of the repairs was less than half of a normal year’s revenue
(D) it is extremely unlikely that any storm this year will be so severe as to cause damage comparable to the damage caused by the storm last year
(E) many of the customers who would ordinarily have stayed at the Bluewater during the first quarter will probably reschedule their stay for later in the year

siddhantvarma · Answer

To complete this argument logically, we need to find an option that explains why the Bluewater Hotel is unlikely to see its revenue drop to half of a normal year's revenue, even though it was closed during the first quarter—a period that typically accounts for half of its annual revenue.

(A) talks about next year's revenue and (B) talks about other hotels so we can   eliminate both (A) and (B)   since they're irrelevant.

(C) the cost of the repairs was less than half of a normal year’s revenue
The argument is concerned with revenue, not costs. Even if the repair costs are low, it doesn't explain how the Bluewater will earn enough revenue to compensate for the first-quarter closure.   Eliminate (C).

(D) it is extremely unlikely that any storm this year will be so severe as to cause damage comparable to the damage caused by the storm last year
This talks about the likelihood of future storms but does not address how the hotel will make up for the lost revenue this year. It is irrelevant to the current year's revenue situation so we can   eliminate (D)   as well.

(E) many of the customers who would ordinarily have stayed at the Bluewater during the first quarter will probably reschedule their stay for later in the year  
This option directly addresses the issue. If many customers reschedule their stays for later in the year, the hotel can potentially make up for the lost revenue from the first quarter. This explains why the hotel's total revenue for the year might not drop to half of a normal year's revenue.

Hence  (E)  most logically completes the arugment.

xyzzzz2255 · Answer

Why the answer cannot be "C". The cost of repair will be adjusted from the revenues this year so this can also contribute to the revunes going down.

siddhantvarma · Answer

The argument states that: 
  Nevertheless, the Bluewater is unlikely to see this year’s revenue drop to half of a normal year’s revenue, since __________.
  
We need to find an answer choice that tells us that this year's revenue will be greater than or equal to half of normal year's revenue. 
For ex, let's say normal year's revenue is $5000. So this year's revenue needs to be at least $2500 or more.

(C) states that:
 
Okay, so let's say the cost of the repairs was less than $2500. But how does that affect revenue?

Revenue = Total income generated from the business

If you own an ice cream parlour and say you sell 10 ice creams a month at $2 each, your monthly revenue = 10*$2 = $20. Now you might have costs such as rent, staff's salaries, raw materials, electricity, etc. However those costs don't affect your "revenue". They affect your profitability. Revenue is simply the income you generate. Costs aren't involved in it.

Hence, the cost of repair for Bluewater do not contribute to the revenues in any way. Therefore, it doesn't tell us if this year's revenue will be half of normal year's revenue, less or more so (C) cannot be the answer. Hope this clarifies.

The Bluewater Hotel usually earns half its yearly revenue during the

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