Critical Reasoning

Corporate Officer: Last year was an unusually poor one for our chemical division, which has traditionally contributed about 60 percent of the corporation’s profits. It is therefore encouraging that there is the following evidence that the pharmaceutical division is growing stronger: it contributed 45 percent of the corporation’s profits, up from 20 percent the previous year.

On the basis of the facts stated, which of the following is the best critique of the evidence presented above?

(A) The increase in the pharmaceutical division’s contribution to corporation profits could have resulted largely from the introduction of single, important new product.
(B) In multidivisional corporations that have pharmaceutical divisions, over half of the corporation’s profits usually come from the pharmaceuticals.
(C) The percentage of the corporation’s profits attributable to the pharmaceutical division could have increased even if that division’s performance had not improved.
(D) The information cited does not make it possible to determine whether the 20 percent share of profits cited was itself an improvement over the year before.
(E) The information cited does not make it possible to compare the performance of the chemical and pharmaceutical divisions in of the percent of total profits attributable to each.

I go with E

The information about chemical division is not available for proper comparison.

(C)
The percentage of the corporation’s profits attributable to the pharmaceutical division could have increased even if that division’s performance had not improved.

If total company profits fell but the divisons profit amount stayed the same---> this would result in % increase but the performace would be the same...

OA ?

Yeah .. OA is C !!

Dont worry, You will get 700

Perfect question to understand the percentage trap. Nice one!

Do you by any chance have the OE. What is the source?

No OE buddy. Only OA . source is 1000 series

if profit contribution of chemical division declines and profit contribution of pharma remains same, there is an automati increase of Pharma's contribution.

(C)

Scenario 1: Lets say the profit contribution of chemical division declined by only 2%. So now if pharma division contributes 45%(25% up YoY) then its performance must have improved. (Assuming divisions other than pharma and chemical performed just like the previous year)

Scenario 2 is like what bidisha said.
if profit contribution of chemical division declines and profit contribution of pharma remains same, there is an automatic increase of Pharma's contribution

So the performance of pharma division depends on 2 things: how bad the chemical division performed and how did the company perform overall.

Now this information is not present here. That's why i think the answer should be E.

I agree with hardik!!

I too picked E.

And also, the questions stem asks to find the best CRITIQUE for the evidence cited in the question.

I think...E rightly does it by stating that the information provided is not sufficient.

However, the OA is C.... :roll:

Could somebody explain why C is more appropriate ???

jeevan.Gk wrote:Corporate Officer: Last year was an unusually poor one for our chemical division, which has traditionally contributed about 60 percent of the corporation’s profits. It is therefore encouraging that there is the following evidence that the pharmaceutical division is growing stronger: it contributed 45 percent of the corporation’s profits, up from 20 percent the previous year.

On the basis of the facts stated, which of the following is the best critique of the evidence presented above?

(A) The increase in the pharmaceutical division’s contribution to corporation profits could have resulted largely from the introduction of single, important new product.
(B) In multidivisional corporations that have pharmaceutical divisions, over half of the corporation’s profits usually come from the pharmaceuticals.
(C) The percentage of the corporation’s profits attributable to the pharmaceutical division could have increased even if that division’s performance had not improved.
(D) The information cited does not make it possible to determine whether the 20 percent share of profits cited was itself an improvement over the year before.
(E) The information cited does not make it possible to compare the performance of the chemical and pharmaceutical divisions in of the percent of total profits attributable to each.

I go with E.

Conclusion: Things Look Encouraging!.

Reason or Premise: PD is growing stronger, 45% this year, 20 % last year.

Premise: CD which normally fetches 60% performs pooly this year.

A. This fact is not in dispute and may well be true so cannot be a critique. Eliminate.
B. Doesn’t criticize the evidence and merely presents a fact that may be true in general but immaterial to a critique of the conclusion in question. Eliminate

C. Merely states or alleges some relationship between PD’s performance and profits, either or both of which have to be criticized , analyzed, compared or undermined using the percentages presented in the argument. A critique is not a mere statement of mathematical or logical fact or relationship that can be true or false.. A critique has to say something is true or false, weak or strong, etc. It cannot be neutral. Eliminate.

D.We may only compare this year and last year, since these are the only two years mentioned as far as the premise about PD is concerned. The premise about CD may involve earlier years, but 1) CD is different from PD and more importantly, No relationship between the two can be determined from the information given. So determining whether the 20 percent share of profits cited was itself an improvement is not a relevant criticism.

E.Correct. Reason Apparent and can be glimpsed from D.

Rashmi1804 wrote:I agree with hardik!!

I too picked E.

And also, the questions stem asks to find the best CRITIQUE for the evidence cited in the question.

I think...E rightly does it by stating that the information provided is not sufficient.

However, the OA is C.... :roll:

Could somebody explain why C is more appropriate ???

If C is true, how does it contribute to things being encouraging? If PD’s share of company profits goes up even while PD’s performance does not, how is that supposed to be make things encouraging? All this is saying is that there is no relationship between PD’s performance and PD’s profit share. But how does this undermine or criticize. If PD’s performance is being cited as the reason why things are looking good, then C would be correct, since it is saying that Performance need to be responsible for PD’s profit. Things are supposed to be looking good because of the 25% differential in in the share of PD’s profit between last year and this year. But what if this 25% jump does not make up for a possible drop in the contribution of CD? We are given no clear information so if Iam the CEO reading this report, I wouldn’t be happy.

If the OA is C, then the designers are in error hear. GMAT or LSAT questions would not have such pitfalls.

Ian,
I was confused between C and D.
In D it is mentioned that 'The information cited does not make it possible to determine whether the 20 percent share of profits cited was itself an improvement over the year before', So please tell me that whether this is out of scope or not coz they are talking about the year before the last year.
And if this not out of scope then i feel that it is a very strong contender.
Please let me know if i am not correct and explain.....

Perfect answer by Ian.
I also feel it should ask for a flaw.
And the way Ian has explained leaves not much to be explained.

Though the argument is not worded properly. It could have been better.