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## Another tough one from Princeton

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Gaurav 2013-fall Really wants to Beat The GMAT!
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Another tough one from Princeton Wed Apr 25, 2012 10:10 am
Elapsed Time: 00:00
• Lap #[LAPCOUNT] ([LAPTIME])
Bert’s Refuse has decided to add salvage to its business services and has offered its client, McCloud Metalworking, the following deal: Bert’s will deduct the amount it receives for selling McCloud’s scrap metal over the next year from the cost of refuse removal for McCloud. McCloud will pay an estimated monthly bill and, at the end of the year, Bert’s will adjust the bill to reflect the true profit from its salvage of McCloud’s scrap.

Which of the following, if it occurred, would constitute a disadvantage for McCloud of the plan described above?

Bert’s Refuse makes the same deal with another metalworking firm

A steady decrease in the price for savaged scrap metal over the year that the deal is in effect

McCloud receives orders for goods which generate more scrap metal than usual

An increase in demand for McCloud’s goods

Bert’s Refuse decides to salvage other materials which McCloud’s does not generate as scrap

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agarwalmanoj2000 Rising GMAT Star
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Wed Apr 25, 2012 7:29 pm
IMO B

A steady decrease in the price for savaged scrap metal over the year that the deal is in effect.

If the price of salvage scrap metal decreases over the year, McCloud will get overall lesser amount as deduction at end of year than the overall amount McCloud would have have received every month. Thus this is disadvantageous for McCloud.

HTH.

karthikgmat Really wants to Beat The GMAT!
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Wed Apr 25, 2012 7:57 pm
I also opted B.

But, does E have a chance ?

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