An electric-power company gained greater profits and provided electricity to consumers at lower rates per unit of electricity by building larger-capacity more efficient plants and by stimulating greater use of electricity within its area. To continue these financial trends, the company planned to replace an old plant by a plant with triple the capacity of its largest plant.
The company’s plan as described above assumed each of the following EXCEPT:
(A) Demand for electricity within the company’s area of service would increase in the future.
(B) Expenses would not rise beyond the level that could be compensated for by efficiency or volume of operation, or both.
(C) The planned plant would be sufficiently reliable in service to contribute a net financial benefit to the company as a whole.
(D) Safety measures to be instituted for the new plant would be the same as those for the plant it would replace.
(E) The tripling of capacity would not result in insuperable technological obstacles to efficiency.
Please advice on the reasoning. OA is D.
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An electric-power company
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Dream Weaver
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Hi,
Lets summarize the stimulus:
In the past, building of larger capacity and more efficient plants and causing grater use of electricity enabled to increase profits and lower rates. So, the company concludes that building a new larger plant will further the process.
The question asks us to find the answer that is NOT assumed in the stimulus:
A. If the demand will stay the same there will be no use for the extra manufactured electricity, and so revenues will not grow as expected.
B. If expenses were to rise beyond of the savings, the company will actually lose money.
C. If the plant is not reliable to contribute benefits the goal will be not meet.
D. Here we have to be careful - when reading the answer, we might be tempted to read to much into the information granted. If you found yourself saying that reduction of safety measures might be reduced and therefore the company will spend more on compensations - you have done so. Effects of safety don't play a part in the stimulus, and so this answer is out of scope.
E. If the plant will not increase efficiency the goal will be not met.
Therefore, I choose D.
Lets summarize the stimulus:
In the past, building of larger capacity and more efficient plants and causing grater use of electricity enabled to increase profits and lower rates. So, the company concludes that building a new larger plant will further the process.
The question asks us to find the answer that is NOT assumed in the stimulus:
A. If the demand will stay the same there will be no use for the extra manufactured electricity, and so revenues will not grow as expected.
B. If expenses were to rise beyond of the savings, the company will actually lose money.
C. If the plant is not reliable to contribute benefits the goal will be not meet.
D. Here we have to be careful - when reading the answer, we might be tempted to read to much into the information granted. If you found yourself saying that reduction of safety measures might be reduced and therefore the company will spend more on compensations - you have done so. Effects of safety don't play a part in the stimulus, and so this answer is out of scope.
E. If the plant will not increase efficiency the goal will be not met.
Therefore, I choose D.
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lunarpower
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remember that ASSUMPTIONS must be ABSOLUTELY NECESSARY.
since this is true, there's a powerful test that you can use for correct assumptions:
if a CORRECT ASSUMPTION is NEGATED (i.e., if the opposite is assumed to be true), then the passage must become INVALID.
if you can reverse an "assumption" and the passage is still valid, then you've got the wrong assumption.
--
let's apply the above test to the choices listed here.
(a)
assume that demand WILL NOT increase in the future.
in this case, the company cannot "continue the financial trends", because one of those financial trends is "stimulating greater use of electricity within the area", and so the passage is invalidated.
therefore, this assumption is required.
(b)
assume that expenses WILL rise past the level that could be compensated for by efficiency or volume or both.
if this is the case, then the increases in volume and efficiency will cause expenses to rise past this point, and so the company will incur a loss, invalidating the passage.
therefore, this assumption is required.
(c)
assume that the plant WILL NOT contribute a net financial benefit.
if this is true, then the company won't continue to "gain greater profits", so the passage is invalidated.
therefore, this assumption is required.
(d)
assume that the safety measures WILL NOT be the same as those of the old plant.
this will have no effect whatsoever on anything described in the passage.
therefore, this is NOT a required assumption.
(e)
assume that there WILL be "insuperable technological obstacles to efficiency".
if this is the case, then efficiency won't increase, invalidating the passage.
therefore, this assumption is required.
ans = (d)
since this is true, there's a powerful test that you can use for correct assumptions:
if a CORRECT ASSUMPTION is NEGATED (i.e., if the opposite is assumed to be true), then the passage must become INVALID.
if you can reverse an "assumption" and the passage is still valid, then you've got the wrong assumption.
--
let's apply the above test to the choices listed here.
(a)
assume that demand WILL NOT increase in the future.
in this case, the company cannot "continue the financial trends", because one of those financial trends is "stimulating greater use of electricity within the area", and so the passage is invalidated.
therefore, this assumption is required.
(b)
assume that expenses WILL rise past the level that could be compensated for by efficiency or volume or both.
if this is the case, then the increases in volume and efficiency will cause expenses to rise past this point, and so the company will incur a loss, invalidating the passage.
therefore, this assumption is required.
(c)
assume that the plant WILL NOT contribute a net financial benefit.
if this is true, then the company won't continue to "gain greater profits", so the passage is invalidated.
therefore, this assumption is required.
(d)
assume that the safety measures WILL NOT be the same as those of the old plant.
this will have no effect whatsoever on anything described in the passage.
therefore, this is NOT a required assumption.
(e)
assume that there WILL be "insuperable technological obstacles to efficiency".
if this is the case, then efficiency won't increase, invalidating the passage.
therefore, this assumption is required.
ans = (d)
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Pueden hacerle preguntas a Ron en castellano
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On peut poser des questions à Ron en français
Voit esittää kysymyksiä Ron:lle myös suomeksi
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Dream Weaver
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divineacclivity
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Ron,lunarpower wrote:remember that ASSUMPTIONS must be ABSOLUTELY NECESSARY.
since this is true, there's a powerful test that you can use for correct assumptions:
if a CORRECT ASSUMPTION is NEGATED (i.e., if the opposite is assumed to be true), then the passage must become INVALID.
if you can reverse an "assumption" and the passage is still valid, then you've got the wrong assumption.
--
let's apply the above test to the choices listed here.
(a)
assume that demand WILL NOT increase in the future.
in this case, the company cannot "continue the financial trends", because one of those financial trends is "stimulating greater use of electricity within the area", and so the passage is invalidated.
therefore, this assumption is required.
(b)
assume that expenses WILL rise past the level that could be compensated for by efficiency or volume or both.
if this is the case, then the increases in volume and efficiency will cause expenses to rise past this point, and so the company will incur a loss, invalidating the passage.
therefore, this assumption is required.
(c)
assume that the plant WILL NOT contribute a net financial benefit.
if this is true, then the company won't continue to "gain greater profits", so the passage is invalidated.
therefore, this assumption is required.
(d)
assume that the safety measures WILL NOT be the same as those of the old plant.
this will have no effect whatsoever on anything described in the passage.
therefore, this is NOT a required assumption.
(e)
assume that there WILL be "insuperable technological obstacles to efficiency".
if this is the case, then efficiency won't increase, invalidating the passage.
therefore, this assumption is required.
ans = (d)
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(A) Demand for electricity within the company's area of service would increase in the future.
This is true, as population increases within a certain area, the demand for electricity will also increase. Is the increase in demand vs. the population is directly proportional with regards to profit?
This is true, as population increases within a certain area, the demand for electricity will also increase. Is the increase in demand vs. the population is directly proportional with regards to profit?
