RC_BUt_CR!

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RC_BUt_CR!

by gmat_perfect » Sat Aug 21, 2010 11:07 am
Federal efforts to aid minority businesses began in the
1960's when the Small Business Administration (SBA)
began making federally guaranteed loans and govern-
ment-sponsored management and technical assistance
(5) available to minority business enterprises. While this
program enabled many minority entrepreneurs to
form new businesses, the results were disappointing,
since managerial inexperience, unfavorable locations,
and capital shortages led to high failure rates. Even 15
(10) years after the program was implemented, minority
business receipts were not quite two percent of the national
economy's total receipts.

Question:

Which of the following statements about the SBA program can be inferred from the passage?
(A) The maximum term for loans made to recipient businesses was 15 years.
(B) Business loans were considered to be more useful to recipient businesses than was management and technical assistance.
(C) The anticipated failure rate for recipient businesses was significantly lower than the rate that actually resulted.
(D) Recipient businesses were encouraged to relocate to areas more favorable for business development.
(E) The capitalization needs of recipient businesses were assessed and then provided for adequately.

[spoiler]OA: C[/spoiler]

BUT I could not understand even after reading the official explanation.

Would any expert explain?

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by abhigang » Mon Aug 23, 2010 2:53 am
Federal efforts to aid minority businesses began in the
1960’s when the Small Business Administration (SBA)
began making federally guaranteed loans and govern-
ment-sponsored management and technical assistance
(5) available to minority business enterprises. While this
program enabled many minority entrepreneurs to
form new businesses, the results were disappointing,
since managerial inexperience, unfavorable locations,
and capital shortages led to high failure rates. Even 15
(10) years after the program was implemented, minority
business receipts were not quite two percent of the national
economy’s total receipts.


If you concentrate on these bolded areas, you will find that efforts were done to lower the faliure rate (which was anticipated) but the total revenue did not even reach 2% i.e., there were a higher % of failure.

Hence the aniticipated failure rate was lower than the actual failure rate.