BREAKING: Target Test Prep releases Brand New 2026 On Demand GMAT prep course

Redeem

Farm equipment

This topic has expert replies
Post new topic Post Reply
Previous Topic Next Topic
Legendary Member
Posts: 2789
Joined: Tue Jul 26, 2011 12:19 am
Location: Chennai, India
Thanked: 206 times
Followed by:43 members
GMAT Score:640

Farm equipment

by GmatKiss » Tue May 15, 2012 7:32 am
A United States manufacturer of farm equipment reported a 1988 third-quarter net income of $32 million, compared with $25.5 million in the third quarter of 1987.
This increase was realized despite a drop in United States retail sales of farm equipment toward the end of the third quarter of 1988 as a result of a drought.

Which of the following, if true, would contribute most to an explanation of the increase in the manufacturer's net income?

(A) During the third quarter of 1988, the manufacturer announced that it would add irrigation systems to its line of products.
(B) In the third quarter of 1988, the manufacturer paid no wages during a six-week strike, but stocks on hand were adequate to supply dealers.
(C) Sales in the United States of farm equipment made and sold by foreign companies were higher in the third quarter of 1988 than in any previous quarter.
(D) Official dealers of the manufacturer had low supplies of farm equipment during the third quarter of 1988.
(E) Eligible United States farmers benefited from a federal drought-relief fund late in the third quarter of 1988
Top
Source: — Critical Reasoning |
Master | Next Rank: 500 Posts
Posts: 341
Joined: Sun Mar 25, 2012 6:59 pm
Thanked: 17 times
Followed by:4 members
GMAT Score:720

by ice_rush » Tue May 15, 2012 8:45 am
(B) for me.


What's the OA?
Top
User avatar
Master | Next Rank: 500 Posts
Posts: 172
Joined: Wed Jul 09, 2008 3:35 am
Thanked: 3 times
Followed by:1 members
GMAT Score:610

by karthikgmat » Tue May 15, 2012 9:10 am
I dont think that wages not paid to workers would be "INCOME" to company.
Top
Master | Next Rank: 500 Posts
Posts: 435
Joined: Wed Nov 16, 2011 7:27 am
Thanked: 48 times
Followed by:16 members

by alex.gellatly » Tue May 15, 2012 6:09 pm
GmatKiss wrote:A United States manufacturer of farm equipment reported a 1988 third-quarter net income of $32 million, compared with $25.5 million in the third quarter of 1987.
This increase was realized despite a drop in United States retail sales of farm equipment toward the end of the third quarter of 1988 as a result of a drought.

Which of the following, if true, would contribute most to an explanation of the increase in the manufacturer's net income?

(A) During the third quarter of 1988, the manufacturer announced that it would add irrigation systems to its line of products.
(B) In the third quarter of 1988, the manufacturer paid no wages during a six-week strike, but stocks on hand were adequate to supply dealers.
(C) Sales in the United States of farm equipment made and sold by foreign companies were higher in the third quarter of 1988 than in any previous quarter.
(D) Official dealers of the manufacturer had low supplies of farm equipment during the third quarter of 1988.
(E) Eligible United States farmers benefited from a federal drought-relief fund late in the third quarter of 1988
At first I was on the fence between A and E A because the argument stated that there was a drought. During a drought it is conceivable that farmers will buy irrigation systems to combat the drought, thus adding to the firms net income. E because if farmers received aid from the federal government then their income level would increase, thus causing them to buy new farm equipment.

I am going with A because it sounds the strongest of the two. What is the OA?
Top
Master | Next Rank: 500 Posts
Posts: 122
Joined: Tue May 01, 2012 6:05 am
Thanked: 3 times

by ihatemaths » Wed May 16, 2012 1:46 am
E is kind of off topic. they recieved funds from US just to recoup their loss from drought , why would they go and invest in farm equipments when there is drought ?
A sounds fine.
Top
User avatar
Master | Next Rank: 500 Posts
Posts: 307
Joined: Wed Feb 22, 2012 9:45 pm
Thanked: 12 times
GMAT Score:700

by Gaurav 2013-fall » Wed May 16, 2012 2:44 am
+1 for B
Top
Newbie | Next Rank: 10 Posts
Posts: 4
Joined: Fri Dec 28, 2012 2:45 pm

by ergngmat » Fri Jan 04, 2013 7:26 am
It is classic gmat question that has some tricks. IMO B

I think A is wrong because it fails to distinguish announce a product and manufacture a product. They announced it does not mean they start to produce. At the first look I took A as some of you did BUT B is more sound it has no tricks.

If you have two or more competitive options just check the wording and try to understand what is it trying to say.
Top
User avatar
Master | Next Rank: 500 Posts
Posts: 111
Joined: Tue Jan 31, 2012 1:06 pm
Thanked: 15 times
Followed by:8 members

by charu_mahajan » Fri Jan 04, 2013 12:45 pm
A United States manufacturer of farm equipment reported a 1988 third-quarter net income of $32 million, compared with $25.5 million in the third quarter of 1987.This increase was realized despite a drop in United States retail sales of farm equipment toward the end of the third quarter of 1988 as a result of a drought.

Which of the following, if true, would contribute most to an explanation of the increase in the manufacturer's net income?

(A) During the third quarter of 1988, the manufacturer announced that it would add irrigation systems to its line of products.
(B) In the third quarter of 1988, the manufacturer paid no wages during a six-week strike, but stocks on hand were adequate to supply dealers.
(C) Sales in the United States of farm equipment made and sold by foreign companies were higher in the third quarter of 1988 than in any previous quarter.
(D) Official dealers of the manufacturer had low supplies of farm equipment during the third quarter of 1988.
(E) Eligible United States farmers benefited from a federal drought-relief fund late in the third quarter of 1988

For those who are considering A - Look at the sentence in tan. Even if a new line of products was to be added, the fact remains that their was drop in the sales of farm equipment.
For those considering E - Even if the farmers benefited from a drought relief fund, they did not spend the amount on equipment because it's clearly mentioned that the sales of equipment dropped.
There has to be some other factor that contributed to increase in net income. B addresses the issue correctly.
Top
Post new topic Post Reply
• Page 1 of 1