Critical Reasoning

Manufacturing plants in Arundia have recently been acquired in substantial numbers by investors from abroad. Arundian politicians are proposing legislative action to stop such investment, justifying the proposal by arguing that foreign investors, opportunistically exploiting a recent fall in the value of the Arundian currency, were able to buy Arundian assets at less than their true value.

Which of the following, if true, casts the most serious doubt on the adequacy of the Arundian politicians' justification for the proposed legislation?
A. The Arundian government originally welcomed the fall in the value of the Arundian currency because the fall made Arundian exports more competitive on international markets
B.Foreign investors who acquired manufacturing plants generally did so with no intention of keeping and running those plants over the long term.
C.Without the recent fall in the value of the Arundian currency, many of the Arundian assets bought by foreign investors would have been beyond the financial reach of those investors.
D. In Concordia, a country broadly similar to Arundia , the share of manufacturing assets that is foreign - controlled is 60 percent higher than it is in Arundia.
E. The true value of an investment is determined by the value of the profits from it , and the low value of the Arundian currency has depressed the value of any profits earned by foreign investors from Arundian assets.

GMATGuruNY wrote:

Mo2men wrote:Manufacturing plants in Arundia have recently been acquired in substantial numbers by investors from abroad. Arundian politicians are proposing legislative action to stop such investment, justifying the proposal by arguing that foreign investors, opportunistically exploiting a recent fall in the value of the Arundian currency, were able to buy Arundian assets at less than their true value.

Which of the following, if true, casts the most serious doubt on the adequacy of the Arundian politicians' justification for the proposed legislation?
A. The Arundian government originally welcomed the fall in the value of the Arundian currency because the fall made Arundian exports more competitive on international markets
B.Foreign investors who acquired manufacturing plants generally did so with no intention of keeping and running those plants over the long term.
C.Without the recent fall in the value of the Arundian currency, many of the Arundian assets bought by foreign investors would have been beyond the financial reach of those investors.
D. In Concordia, a country broadly similar to Arundia , the share of manufacturing assets that is foreign - controlled is 60 percent higher than it is in Arundia.
E. The true value of an investment is determined by the value of the profits from it, and the low value of the Arundian currency has depressed the value of any profits earned by foreign investors from Arundian assets.

Justification for the proposals to stop foreign investments:
The recent fall in value of Arundian currency has enabled foreign investors to buy Arundian assets at less than their true value.

The correct answer choice must WEAKEN this justification.

E: The true value of an investment is determined by the value of the profits from it, and the low value of the Arundian currency has depressed the value of any profits earned by foreign investors from Arundian assets.
Implication:
With their profits depressed by the weak local currency, Arundian assets are of LITTLE VALUE -- WEAKENING the contention that Arundian assets are being purchased at less than their true value.

The correct answer is E.

Why is choice A wrong???

Mo2men wrote:Why is choice A wrong???

A. The Arundian government originally welcomed the fall in the value of the Arundian currency because the fall made Arundian exports more competitive on international markets.
This information does not refute the contention that Arundian companies are being purchased for less than their value.
Since the justification for preventing these purchases is not weakened, eliminate A.