OA is C, but what's wrong with B?
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[email protected]
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I think the answer is
Well, This question can be tricky, it uses our management and prior knowledge about business in general.
The stimulus states that even though- the "best" (single) selling car has dropped in sales, the stock price of Amcar still went up.
The assumption - other factors don't affect the stock price of the company.
C clearly discusses increment in profit from its sports vehicles section. Thus, the increase in stock price.
B- discusses outsourcing, which can actually have a negative impact on the stock price. You cannot assume that outsourcing means that the company is looking at a brighter future. The outsourcing could also mean that their own factories are not giving the output and manfacturing costs. This situation could actually hurt their stock price.
I hope it makes sense.
Well, This question can be tricky, it uses our management and prior knowledge about business in general.
The stimulus states that even though- the "best" (single) selling car has dropped in sales, the stock price of Amcar still went up.
The assumption - other factors don't affect the stock price of the company.
C clearly discusses increment in profit from its sports vehicles section. Thus, the increase in stock price.
B- discusses outsourcing, which can actually have a negative impact on the stock price. You cannot assume that outsourcing means that the company is looking at a brighter future. The outsourcing could also mean that their own factories are not giving the output and manfacturing costs. This situation could actually hurt their stock price.
I hope it makes sense.
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2010gmat
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i agree with geemat that b and c are close...
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C clearly discusses increment in profit from its sports vehicles section. Thus, the increase in stock price.
--> we dont know wat %age of total sales does SUV comprise...wat if SUV sales are only 1% of total sales??
B- discusses outsourcing, which can actually have a negative impact on the stock price. You cannot assume that outsourcing means that the company is looking at a brighter future. The outsourcing could also mean that their own factories are not giving the output and manfacturing costs. This situation could actually hurt their stock price.
you have hit the nail on the head...if current factories are not performing well and the management makes sure that production is outsourced to lower cot countries then ultimately profits will rise and company will be able to compete well with its competitors...
I hope it makes sense.
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C clearly discusses increment in profit from its sports vehicles section. Thus, the increase in stock price.
--> we dont know wat %age of total sales does SUV comprise...wat if SUV sales are only 1% of total sales??
B- discusses outsourcing, which can actually have a negative impact on the stock price. You cannot assume that outsourcing means that the company is looking at a brighter future. The outsourcing could also mean that their own factories are not giving the output and manfacturing costs. This situation could actually hurt their stock price.
you have hit the nail on the head...if current factories are not performing well and the management makes sure that production is outsourced to lower cot countries then ultimately profits will rise and company will be able to compete well with its competitors...
I hope it makes sense.
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brick2009
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what is the OA: ?
I think it is: C
D,A,E --irrelevant to the argument
In paradox : the answer must impact both the issues.
B: It tells that cost of production was lowered..but how does that explain Drop in sales????
So B is wrong... for that reason alone.. it solves only one part of the paradox.
C: is makes some sense..
Ppl preferred their SUV to their Car...hence the drop..
Dramatic increase ..could explain the reason for the stock prices going up.
In GMAT word have values..
dramatic increase could mean > 25%..so the company did lose car sales ..but over all gained in SUV sales...net = +%
Hence C..
my 2 cents...
I think it is: C
D,A,E --irrelevant to the argument
In paradox : the answer must impact both the issues.
B: It tells that cost of production was lowered..but how does that explain Drop in sales????
So B is wrong... for that reason alone.. it solves only one part of the paradox.
C: is makes some sense..
Ppl preferred their SUV to their Car...hence the drop..
Dramatic increase ..could explain the reason for the stock prices going up.
In GMAT word have values..
dramatic increase could mean > 25%..so the company did lose car sales ..but over all gained in SUV sales...net = +%
Hence C..
my 2 cents...
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[email protected]
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Hey,
Yeah the points you have mentioned make sense.
But, the word 'dramatically' in my opinion means the % increase was much higher than 1%.
From B, you have to make way too may assumptions to prove that it is true.
In any case, to resolve a paradox both the situations have to be accepted as true, in this case the sale of best car - again 'Single' Car- since it is superlative, went down. Yet, the stock price went up.
Since stocks are usually jump up and down on the basis of ur published results, I assumed that with sales for its suv models going up, the price of the stock would go up.
Yeah the points you have mentioned make sense.
But, the word 'dramatically' in my opinion means the % increase was much higher than 1%.
From B, you have to make way too may assumptions to prove that it is true.
In any case, to resolve a paradox both the situations have to be accepted as true, in this case the sale of best car - again 'Single' Car- since it is superlative, went down. Yet, the stock price went up.
Since stocks are usually jump up and down on the basis of ur published results, I assumed that with sales for its suv models going up, the price of the stock would go up.
