Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent return on stockholders’ investments in the company. Higher profits mean higher bonuses. Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR.The conclusion above depends on the assumption that
(A) the firm will have relatively low profits in recession years
(B) the amount represented by a ten percent return on stockholders’ investments in the company will increase from year to year
(C) profits rarely exceed a ten percent return on stockholders’ investments in the company
(D) profits in excess of a ten percent return on stockholders’ investments in the company are all distributed in the form of bonuses
(E) bonuses at DSR never drop to zero
(A) the firm will have relatively low profits in recession years
A
D
D
I am new to this website…….how do we get to know the correct answer…
A
BornFree.. you don’t unless a takegmat.com Admin posts the answer, which never happens.
Your best guess is to look at all the replies and go with the one that occurs most.
I choose [A].
Hope we get to know the right answer soon.
I think ans is A, by POE you can eliminate other choices….
D can easliy be ruled as there is no evidence thatevrything is ditributed as bonus…
I think it should be A..
some posts have mentioned POE… what’s POE???
A
I think the answer should be (E).
Conclusion: It is stated that would be LOWER BONUS compare to previous year.
A) Does not guaranteed bonus. Profit lower then 10% of investment would lead to no profit at all. Though the choice seems very attractive but it’s wrong for the reason said above.
B) Out of scope
C) Simply goes opposite to the conclusion.
D) repeats the premise but do not lead to the conclusion.
E) CORRECT. Since, bonus never drops to ZERO means therefore would be guaranteed profit though may be less.
A is correct.
The assumption is that company will make less profit in a recessionary year.
A looks to be the least in-plausable option
D Is assumption that fill the gap
A is correct. The assumption is that DSR is in an industry where profits follow the economy, such as car sales. And that they are not in an industry where profits are resistant to changes in the economy, such as water or cable.
E is incorrect because the first statement says that bonuses arent awarded unless profits are great enough for shareholders get a >10% ROI. The third statement suggests that it is possible (given a big enough economic recession) for profits to be lower than 10%.
Intel, POE stands for process of elimination
option A
I don’t think there is a confusion anywhere
A is the obvious answer
A
D
e – is correct
A
‘A’ is the guy here….
“A” Reason as per POE
D
a
d
I think E .
pakka answer is A, as no other option does not match
explanation why others are not the answers:-
B) Need not increase from year to year
C)He did not say that ant any point of the question.
D)(some ppl opted for this) – the option represents that excess profits will be distributed among the stake holders. Thats not what he said , when excess profits are there there will be high bonus is what the question meant.
E)(most ppl opted) – any reason y should any one opt for this?
99 % — it shud be A
Answer should be >> A
A
Close Call B/w A and E.
“E” because it is clearly stated that “bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR”. That Means bonuses were given even during recession years. So bonuses never dropped Zero.
“A” not because explicitly stated in argument.
A. of course
A
A…takegmat.com team, the email doesnt reaches my inbox consistently…its coming intermittantly….pls see.
Ans A
Option A does’nt confirms whther Bonus will be distributed or not while Option E guarentees the same.
I will try to explain my reason of choosing E over A.
Look closely. A is clearly mentioned in the passage “bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits “. Hence, A is just a rephrase of the already stated sentence. Then, how can it be an assumption?
Now, E. E because it can be very well assumed that the bonuses never drop to zero even though it could be relatively less in the recession years. E, thus, gives a strong reason to be the answer.
According to me the answer should be E.
The assumption is that though in recession years, profits may reduce but will always exceed 10% of stockholders investment. Hence everyone will bonus.
a
A
E,bonuses are distributed clarifies that bonus never dropped to zero