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Updated on: 19 Aug 2025, 05:09
Originally posted by Sajjad1994 on 23 Jan 2024, 05:37.
Last edited by Sajjad1994 on 19 Aug 2025, 05:09, edited 4 times in total.
Last edited by Sajjad1994 on 19 Aug 2025, 05:09, edited 4 times in total.
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The combined expected profit for product A is higher than that for product B at the end of third year, according to internal financial analysis.: Yes
According to all three sources, the expected cost of producing product A is higher than that of producing product B in year 1.: Yes
Internal financial analysis predicts a higher profit for product A than for product B in year 2, but market research predicts the opposite.: No
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
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Question Stats:
81% (02:49) correct
19%
(02:57)
wrong
based on 289
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A company is considering investing in one of two new products, product A or product B. The company has gathered data on the expected cost and revenue of each product over the next three years from three different sources: market research, internal financial analysis, and industry experts. The data is presented in the table below. All amounts are in US$.
(Sort ↕ the table by clicking on the headers)
For each of the following statements, select Yes if the statement is true based on the information provided; otherwise, select No.
Year 1 | Year 2 | Year 3 | ||||
| Product | Revenue | Cost | Revenue | Cost | Revenue | Cost |
|---|---|---|---|---|---|---|
| A (Market Research) | 50000 | 40000 | 75000 | 60000 | 100000 | 80000 |
| A (Internal Financial Analysis) | 60000 | 50000 | 80000 | 70000 | 100000 | 80000 |
| A (Industry Experts) | 45000 | 35000 | 60000 | 50000 | 85000 | 70000 |
| B (Market Research) | 40000 | 30000 | 50000 | 40000 | 70000 | 60000 |
| B (Internal Financial Analysis) | 45000 | 35000 | 60000 | 50000 | 80000 | 70000 |
| B (Industry Experts) | 30000 | 20000 | 50000 | 30000 | 70000 | 50000 |
For each of the following statements, select Yes if the statement is true based on the information provided; otherwise, select No.
| Yes | No | |
| The combined expected profit for product A is higher than that for product B at the end of third year, according to internal financial analysis. | ||
| According to all three sources, the expected cost of producing product A is higher than that of producing product B in year 1. | ||
| Internal financial analysis predicts a higher profit for product A than for product B in year 2, but market research predicts the opposite. |
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Official Answer
The combined expected profit for product A is higher than that for product B at the end of third year, according to internal financial analysis.: Yes
According to all three sources, the expected cost of producing product A is higher than that of producing product B in year 1.: Yes
Internal financial analysis predicts a higher profit for product A than for product B in year 2, but market research predicts the opposite.: No
24 Jan 2024, 13:50
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Statement 1: The expected profits for product A are higher than those for product B in all three years, according to internal financial analysis.
We need to look at and compare second row and fifth row
Second row: Product A (Internal Financial Analysis)
A (Internal Financial Analysis) 60000-50000=10000 80000-70000=10000 100000-80000=20000
Profit for three years= 10000+10000+20000=40000
Second row: Product B A (Internal Financial Analysis)
A (Internal Financial Analysis) 45000-35000=10000 60000-50000=10000 80000-70000=10000
Profit for three years= 10000+10000+10000=30000
Hence 40,000>30,000
Answer: Yes
We need to look at and compare second row and fifth row
Second row: Product A (Internal Financial Analysis)
A (Internal Financial Analysis) 60000-50000=10000 80000-70000=10000 100000-80000=20000
Profit for three years= 10000+10000+20000=40000
Second row: Product B A (Internal Financial Analysis)
A (Internal Financial Analysis) 45000-35000=10000 60000-50000=10000 80000-70000=10000
Profit for three years= 10000+10000+10000=30000
Hence 40,000>30,000
Answer: Yes
26 Jan 2024, 08:19
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Sajjad1994
“The expected profits for product A are higher than those for product B in all three years, according to internal financial analysis.”
I thought we would only compare year1, year2, year3 seperately. For example, A's profit in year 1 is 10000 which means the same but not higher than B's profit.
Profits in year 2 are also the same for both.
That means "higher" is not true. WHY we combine?
26 Jan 2024, 08:50
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cathyjiang04
If it meant comparing each year separately, it would say “The expected profits for product A are higher than those for product B in each of the three years, according to internal financial analysis.”
The question could be made a bit more clear, and Ill edit it accordingly.
