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OG 2018 CR Q Manufacturing plants in Arundia

Expert replies
by lionsshare » Mon Aug 21, 2017 9:36 pm
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.

OA: E

Hi, Experts. Please, could anyone explain how to eliminate B?
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Source: — Critical Reasoning |

by DavidG@VeritasPrep » Tue Aug 22, 2017 11:12 am
lionsshare 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.

OA: E

Hi, Experts. Please, could anyone explain how to eliminate B?
The government's justification for pursuing legislation that would stop foreign investors from purchasing manufacturing plants is rooted in the notion that these investors are acquiring underpriced assets. To cast doubt on the justification, an answer should show that, in fact, the assets are not underpriced. This is what E does. B sheds no light on the underlying value of the assets.
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