In Country X in 1996, 84% of political donations from businesses came

Question

In Country X in 1996, 84% of political donations from businesses came from those with annual sales of over $100 million. In that same year, 24 companies in the software industry, all of which had shown increases in the valuation of their stock of over 40% in the preceding year, accounted for 19% of business political donations.

If the above statements are true, which of the following must also be true?

(A) Computer companies made more political donations than did pharmaceutical companies.
(B) At least one of the businesses with annual sales of over $100 million showed an increase in the value of its stock in 1995.
(C) Most software companies had sales of less than $100 million in 1995.
(D) Individual contributions accounted for 16% of all political campaign contributions.
(E) The stock of most businesses with annual sales over $100 million did not increase by over 40% in 1996.

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sayan640 · Answer

C should be the answer..Because software industries accounted for such low percentage of donation and most donations came from businesses with 100 million sales , most software companies are likely to have lesser sales. 
IMHO , C should be the answer.

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Sukrit_08 · Answer

The answer should be B
Suppose the amount of donations is 100 units.
That means 84 units came from companies with sales 100 million+ and rest 16 came from companies with less than 100 million sales
Also 19 units of political donations came from software companies that means atleast one software company has more than 100 million sales.

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HarishD · Answer

IMO:
There is some overlap between 84% of political donations from B (annual sales of more than 100M$) and 19% of B political donations (stock price increased by 40%).

My answer is B) At least one of the businesses with annual sales of over $100 million showed an increase in the value of its stock in 1995.

Shwarma · Answer

Option B.

Statement: Within Biz donation (x)--> 0.84x companies are revenue >100 mill USD.
0.19x are Tech companies (they also increased in stock value).

Most true will be --> at least 3 of tech companies are revenue >100 million

Bunuel · Answer

KAPLAN OFFICIAL EXPLANATION

Identify the Question Type:

This is an Inference question, as it asks for a choice that must be true if the statements in the stimulus are true.

Untangle the Stimulus:

Inference stimuli rarely contain complete arguments. Rather, they contain statements from which a deduction will be made. To untangle, just read and paraphrase the statements in the stimulus, noting any statements than can be combined. Here, there are two statements about the source of business political donations in a certain year. The first says that 84% of the donations came from businesses with annual sales of over $100 million. The second says that 19% came from 24 software companies, all of whose stock had increased by over 40% in value the previous year.

Predict the Answer:

Inference questions are typically not predictable. Here, however, the two statements may be combined in an obvious way. If 84% of the donations came from one group, and 19% came from another, there must be some overlap between the two groups. Otherwise, the percentages would add up to more than 100%. That means at least one of the software companies with a major stock increase must be part of the the $100 millon+ companies. The answer doesn't have to come from this combination, but it's helpful to consider it a tentative prediction to be aware of when evaluating the choices.

Evaluate the Choices:

(B) is correct, as it matches the predicted combination of statements. There must be some overlap between the two groups mentioned in the stimulus. In other words, there must be at least one business in the first group (sales of over $100 million) that is also in the second group (a software company that showed an increase in the value of its stock in the previous year).

(A) is not something that must be true from the stimulus, because the stimulus doesn't say anything about pharmaceutical companies. Less obviously, the stimulus doesn't even make a statement about “computer” companies. It refers only to “companies in the software industry,” which may or may not be considered “computer companies.”

(C) is not something that must be true from the numbers in the stimulus. First of all, the stimulus only refers to “24 companies in the software industry.” It doesn't indicate how many companies there are in the entire industry. Thus, (C), which refers to “most software companies,” is not something that can be known for sure from the stimulus. Additionally, even of the 24 companies mentioned, a majority of them can overlap with the first group, having sales of over $100 million. There is nothing in the stimulus to prevent that.

(D) has no direct support whatsoever from the stimulus. The statements don't mention individual contributions at all. The stimulus only deals with political donations from businesses, describing two subsets of that group. Eliminate (D).

(E) is not supported by the stimulus, as nothing is mentioned about the stock of the businesses with annual sales of over $100 million. Even though the 24 software companies were singled out as having their stock increase by over 40%, the stimulus leaves open the possibility that a majority, or even all, of the businesses with sales over $100 million also saw a stock increase of over 40%.

TAKEAWAY:  Always keep in mind that an Inference on the GMAT is something that must be true from the stimulus.

In Country X in 1996, 84% of political donations from businesses came

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In Country X in 1996, 84% of political donations from businesses came

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

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