Critical Reasoning

Because competition has dramatically lowered margins in the industry, Euroquest must reduce personnel expenditures by at least 15% over the next year in order to remain solvent. In order to do so, Euroquest would have to cut entire divisions and benefits programs such that it would reduce personnel expenditures by a full 25% over the next year.

Which of the following can be logically inferred from the information above?


A. Euroquest reduces personnel expenditures by 25% over the next year it will remain solvent.

B. If Euroquest cannot reduce personnel expenditures by 25% over the next year it will not remain solvent.

C. Euroquest is unable to charge as much for its products as it was a year ago.

D. Euroquest competitors earn a higher return on investment for personnel expenditures than Euroquest does.

E. Some of Euroquest competitors will also have to significantly reduce personnel expenditures in order to remain solvent.


OA B

Source: Veritas Prep