Over the last five years, demand for hotel rooms in

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Over the last five years, demand for hotel rooms in Cenopolis has increased significantly, as has the average price Cenopolis hotels charge for rooms. These trends are projected to continue for the next several years. In response to this economic forecast, Centennial Commercial, a real estate developer, is considering a plan to convert several unoccupied office buildings it owns in Cenopolis into hotels in order to maximize its revenues
from these properties.

Which of the following would it be most useful for Centennial Commercial to know in evaluating the plan it is considering?

A. Whether the population of Cenopolis is expected to grow in the next several years
B. Whether demand for office space in Cenopolis is projected to increase in the near future
C. Whether the increased demand for hotel rooms, if met, is likely to lead to an increase in the demand for other travel-related services
D. Whether demand for hotel rooms has also increased in other cities where Centennial owns office buildings
E. Whether, on average, hotels that have been created by converting office buildings have fewer guest rooms than do hotels that were built as hotels
Source: — Critical Reasoning |

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by vinay1983 » Wed Oct 09, 2013 3:32 am
Convert office space to rooms, but what if after conversion the rooms thus resulted are able to get more revenue on the lines of the general trend considering the cost involved in converting them into hotel rooms.

A-What has population to do with it. If it increases then Home estate will grow
B-Very close, but does it really affect the decision making process, don't think so
C-Again we are not interested in fringe benefits such as travel services. Out of scope
D-In other cities it might or might not have grown, but each city has its own growth potential, so unrelated
E-Good one, suppose if the cost of converting the office space is lower than the revenue generated by making it a hotel rooms, then there is no point in making it a hotel room. Suppose at the max one can get 2 rooms, but there are hotels that have more rooms with more facilities. There is every chance that people may prefer that over the "converted ones"
You can, for example never foretell what any one man will do, but you can say with precision what an average number will be up to!

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by theCodeToGMAT » Wed Oct 09, 2013 4:10 am
{A} - INCORRECT; Out of Scope - We are not concerned about population
{B} - HOLD
{C} - INCORRECT; Out of Scope - Real Estate developer is seeking for Hotels
{D} - INCORRECT; Hotels are in Cenopolis..
{E} - INCORRECT; "fewer" guest is not an issue.. suppose average guest number is 1000.. fewer means 900.. Real Estate Developer has not issue with that.. it's a revenue.

Answer [spoiler]{B}[/spoiler]
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by dominhtri1995 » Fri Oct 11, 2013 9:40 am
IMO B

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by sana.noor » Sat Oct 12, 2013 6:01 am
it must be B
suppose the demand for office buildings increases, then it is useless to convert these buildings into hotels. it will cost high for renovating office buildings into hotel rooms. so if demand for office buildings will increase then it is useless to pan for a hotel. For me Choice E isnt a good option. because either their are fewer guest rooms or more, it wont affect.
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