GMAT Prep question

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GMAT Prep question

by anksm22 » Sun Nov 02, 2014 9:48 am
Despite recent increases in sales and cash flow that have propelled automobile companies' common stocks to new highs, several industry analysts expect automakers, in order to conserve cash, to set dividends more conservatively that they were.

A)to set dividends more conservatively than they were
B)to set dividends more conservatively than they have been
C)to be more conservative than they have been in setting dividends
D)that they will be more conservative than they were in setting dividends
E)that they will be more conservative than they have been to set dividends

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by [email protected] » Sun Nov 02, 2014 11:35 am
Hi anksm22,

This SC includes an "intervening phrase" (....,in order to conserve cash,...); you should be able to remove this phrase from the sentence and still have a full, grammatically correct sentence left over. This should help you to eliminate some of the answer choices (which would not make sense once you remove the intervening phrase).

1) Ignoring the intervening phrase, we would have:

"...several industry analysts expect automakers...."; here, what follows should be a verb ("to ____" makes sense; "that" does not). Eliminate D and E.

2) Modification: the word "conservatively" or "conservative" shows up in each answer. Based on the place of these words, the answers are telling us that either the automakers are supposed to be more conservative or the dividends are supposed to be more conservative. Dividends don't exist on their own - they're the result of someone making a decision - so its the automakers who are supposed to be more conservative in their decision-making (about the dividends). Eliminate A and B.

Final Answer: C

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by GMATGuruNY » Sun Nov 02, 2014 1:02 pm
anksm22 wrote:Despite recent increases in sales and cash flow that have propelled automobile companies' common stocks to new highs, several industry analysts expect automakers, in order to conserve cash, to set dividends more conservatively that they were.

A)to set dividends more conservatively than they were
B)to set dividends more conservatively than they have been
C)to be more conservative than they have been in setting dividends
D)that they will be more conservative than they were in setting dividends
E)that they will be more conservative than they have been to set dividends
Generally, two different pronouns cannot have the same referent.
D and E: automakers...that they will be
Here, two different pronouns -- that and they -- both seem to refer to automakers.
Eliminate D and E.

In A and B, it is not crystal clear whether they refers to automakers or to dividends.
Answer choice C avoids this ambiguity by placing dividends AFTER they.
Eliminate A and B.

The correct answer is C.
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