A major city uses income from tax revenues to fund incentives for high-end retailers from out of town to open stores in its new downtown shopping district. Although city taxes on such stores will generate tax revenues greater than the cost of the incentives, this practice is unwise. Locally based high-end retailers would open stores in the new shopping district without requiring the city to spend tax revenue on incentives.
Which of the following, if true, most strongly supports the city's policy of offering cash incentives to out-of-town retailers?
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Some retailers already headquartered in the city sell similar brands at similar prices to those of high-end retailers from out of town.
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The city's tax revenues have been steadily declining for the past decade.
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A longstanding city law exempts locally-based businesses from having to pay city taxes.
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The practice of cities offering cash incentives to retailers began less than a decade ago.
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Unlike retailers headquartered in the city, the high-end retailers offered cash incentives have hundreds of stores across the country.
Retailers
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IMO [spoiler]C[/spoiler]
Explanation::
The ultimate motive is to generate tax revenue.If there is a long outstanding law that exempts the local retailers to pay tax,then there is no point in asking them to open new shops in downtown.Rather it would be beneficial to invest some capital to entice the high-end retailer from out of town so that they would pay tax which is certainly higher that the incentive paid to them.
Explanation::
The ultimate motive is to generate tax revenue.If there is a long outstanding law that exempts the local retailers to pay tax,then there is no point in asking them to open new shops in downtown.Rather it would be beneficial to invest some capital to entice the high-end retailer from out of town so that they would pay tax which is certainly higher that the incentive paid to them.
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It is definitely Aheshamelaziry wrote:A major city uses income from tax revenues to fund incentives for high-end retailers from out of town to open stores in its new downtown shopping district. Although city taxes on such stores will generate tax revenues greater than the cost of the incentives, this practice is unwise. Locally based high-end retailers would open stores in the new shopping district without requiring the city to spend tax revenue on incentives.
Which of the following, if true, most strongly supports the city's policy of offering cash incentives to out-of-town retailers?
*
Some retailers already headquartered in the city sell similar brands at similar prices to those of high-end retailers from out of town.
*
The city's tax revenues have been steadily declining for the past decade.
*
A longstanding city law exempts locally-based businesses from having to pay city taxes.
*
The practice of cities offering cash incentives to retailers began less than a decade ago.
*
Unlike retailers headquartered in the city, the high-end retailers offered cash incentives have hundreds of stores across the country.
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fruti_yum wrote:It is definitely A .. Please let me know if i'm right as i'll be glad to explain my reasoning in that case..heshamelaziry wrote:A major city uses income from tax revenues to fund incentives for high-end retailers from out of town to open stores in its new downtown shopping district. Although city taxes on such stores will generate tax revenues greater than the cost of the incentives, this practice is unwise. Locally based high-end retailers would open stores in the new shopping district without requiring the city to spend tax revenue on incentives.
Which of the following, if true, most strongly supports the city's policy of offering cash incentives to out-of-town retailers?
*
Some retailers already headquartered in the city sell similar brands at similar prices to those of high-end retailers from out of town.
*
The city's tax revenues have been steadily declining for the past decade.
*
A longstanding city law exempts locally-based businesses from having to pay city taxes.
*
The practice of cities offering cash incentives to retailers began less than a decade ago.
*
Unlike retailers headquartered in the city, the high-end retailers offered cash incentives have hundreds of stores across the country.
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Hurray..That OA was a breather to me. after a string of hasty incorrect answers, when i saw my answer popping out to be the cortrect one,,i feel elated...
I noted one thing,, when we give enough attention to the options by giving some extra time we can " shoot" all the CR queations precisely..
GMAT is all about speed & accuracy.. wow..wat a Tom&Jerry it is!!!
Rgds
Govardhan
I noted one thing,, when we give enough attention to the options by giving some extra time we can " shoot" all the CR queations precisely..
GMAT is all about speed & accuracy.. wow..wat a Tom&Jerry it is!!!
Rgds
Govardhan
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I don't know how I missed this question !!! I spent so much time with CR. Always, when i get a wrong answer i look up the right answer and i don't have to read the explanation to why it is wrong, I just noticed my mistake. So, Why didn't I choose the right answer.gmatmachoman wrote:Hurray..That OA was a breather to me. after a string of hasty incorrect answers, when i saw my answer popping out to be the cortrect one,,i feel elated...
I noted one thing,, when we give enough attention to the options by giving some extra time we can " shoot" all the CR queations precisely..
GMAT is all about speed & accuracy.. wow..wat a Tom&Jerry it is!!!
Rgds
Govardhan