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OG CR:With seventeen casinos, Moneyland

This topic has 1 member reply

Top Member

OG CR:With seventeen casinos, Moneyland

Post Sat Sep 17, 2016 5:14 am
Elapsed Time: 00:00
  • Lap #[LAPCOUNT] ([LAPTIME])
    With seventeen casinos, Moneyland operates the most casinos in a certain state. Although intent on expanding, it was outmaneuvered by Apex Casinos in negotiations to acquire the Eldorado chain. To complete its acquisition of Eldorado, Apex must sell five casinos to comply with a state law forbidding any owner to operate more than one casino per county. Since Apex will still be left operation twenty casinos in the state, it will then have the most casinos in the state.

    Which of the following, if true, most seriously undermines the prediction?

    A) Apex, Eldorado, and Moneyland are the only organizations licensed to operate casinos in the state.
    B) The majority of Eldorado's casinos in the state will need extensive renovations if they are to continue to operate profitably.
    C) Some of the state's counties do not permit casinos.
    D) Moneyland already operates casinos in the majority of the state's counties.
    E) Apex will use funds it obtains from the sale of the five casinos to help fund its acquisition of the Eldorado chain.

    OA:A

    Source:OG 2017

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    Marty Murray Legendary Member
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    Post Mon Nov 14, 2016 5:21 am
    The conclusion is about numbers. So let's look at the numbers.

    Moneyland has 17 casinos.

    Apex has to sell 5 casinos.

    Apex will have 20 casinos.

    Law restricts any owner to operating 1 casino per county.

    Prediction: Apex will have most casinos in the state.

    Question: Which of the following, if true, most seriously undermines the prediction?

    (A) If Apex buys Eldorado, then what this answer choice is saying means that Apex and Moneyland will be the only two licensed organizations. So here are two possible scenarios.

    Scenario 1

    Apex: Sells 5 casinos. Ends up with 20.

    Moneyland: Only other organization. Therefore only buyer of 5 casinos. Already has 17. Ends up with 17 + 5 = 22.

    Moneyland has more. This is contrary to the conclusion.

    Scenario 2

    Even though the prompt seems to indicate that the deal with go through, just to be safe let's consider the fact that it may be the case that Moneyland cannot buy all 5 casinos without violating the one per county per organization law. In this case, doing the deal may not be feasible.

    If the deal does not get done, Moneyland will remain the operator with the most casinos. This is contrary to the conclusion.

    (B) Trap answer. You might make up some story that this answer means that some of the casinos that Apex buys will not continue to operate, but really this does not support that story.

    (C) This makes no difference. One can reasonably assume that in GMAT land the casinos being bought are in counties that do permit them. More importantly, we know from the prompt that, regardless of what some counties permit or don't permit, in order to get the deal done, Apex has to sell five and end up with twenty.

    (D) This does not undermine the conclusion that Apex will have the most.

    (E) This explains how the deal will work, not why Apex will not have the most.

    So there are three clearly wrong answers, C, D and E, one answer that one could choose if one makes up an unsupported story, B, and one correct answer, A.

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