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support criticism

by Soumita Ghosh » Sun Feb 17, 2013 11:51 am
Company Spokesperson: This year, more than 70% of the guests who stayed with us over the past summer are planning to return to our resorts for a summer vacation. Therefore, I believe that we are well-positioned for another strong and profitable quarter.

Industry Analyst: This is not necessarily true. Nearly three quarters of the company's profits come from the attendance of its theme parks located at its major resorts, and it is not certain how this segment will perform this summer.


Which of the following statements, if true, would support the criticism of the Industry Analyst?


A)The company's management possesses more accurate financial information than is accessible to industry analysts.

B)The industry analyst represents an independent investment firm, which is not affiliated with the company.

C)The company's revenues and profits have more than doubled over the past 3 years.

D)Because of the seasonality in the vacation travel and theme park attendance, summer is the most important season for the firm's operations, accounting for over half of the firm's annual profits.

E)The vast majority of guests who visit the company's resorts attend its theme parks only once, usually during their first week of stay.

OA E

I chose D correct.

My explanation goes like this:

D)Because of the seasonality in the vacation travel and theme park attendance, summer is the most important season for the firm's operations, accounting for over half of the firm's annual profits.
According to Analyst Company's theme park is company's cash cow. Whereas according to Company Spokesperson Company earn profit from guest who stays at company's resort. So analyst criticizes the Spokesperson by saying that company earn maximum profit from theme park not from guest staying at resort. Our work is we have to find choice which supports analyst criticism.. This choice supports the criticism. As it is given theme park attendance.....accounting for over half of the firm's annual profits.So from this statement it is clear that company earn its maximum profit from theme park.

E)The vast majority of guests who visit the company's resorts attend its theme parks only once, usually during their first week of stay.
According to Analyst Company's theme park is company's cash cow. Whereas according to Company Spokesperson Company earn profit from guest who Stays at company's resort. So analyst criticizes the Spokesperson by saying that company earn maximum profit from theme park not from guest staying at resort. Our work is we have to find choice which supports analyst criticism.. This choice neither supports nor weaken the criticism. Because it is given in the choice that the guests who visit the company resort majority among them also visit company's theme park.So it is not clear from the statement whether the company earn maximum profit from the guest who visit resort or from the guest who visit theme park. Moreover it is given in the statement that the majority guests of resort visit theme park not all of the guests of resort. So this actually going to weaken the criticism rather than support.

Can anyone let me know where I am wrong??please explain me.
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by shenoydevika » Mon Feb 18, 2013 12:06 am
Hi Soumita...
Two things 1 - The Industry Analyst is criticizing the Company Spokesperson's prediction.
2 - We have to support this criticism.

The Spokesperson says that most of their guest from the past summer are returning this summer. Therefore, they are going to have another strong and profitable quarter.
Analyst says that the Spokesperson's prediction need not be true because the company's profits depends on the attendance at it's theme parks. In short, the company won't earn profit from it's returning guests..

Option E says that majority of the guests attend the theme park only once. So even if they do return to the resort, they won't return to the theme parks and the company won't earn as much profit as it did last year. This supports the Analyst's criticism.

Makes sense?
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by aditya8062 » Mon Feb 18, 2013 8:07 am
@devika i think u have not comprehended E properly : it says:The vast majority of guests who visit the company's resorts attend its theme parks only once, usually during their first week of stay.
meaning that they visit the theme park usually once during the first week of their stay that means if i visit twice or thrice ,for that matter ,i will go there once in the first week of my stay
i feel that what u have concluded wud have been the conclusion had this choice E been as follows :

The vast majority of guests who visit the company's resorts attend its theme parks only once
honestly i feel that E is very poorly structured
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by Soumita Ghosh » Tue Feb 19, 2013 9:01 pm
@shenoydevika I understand your explanation but still I am not clear.

the majority of guests visit the theme park once.Thus even if they do return to the resort, they won't return to the theme parks. So what if they do not visit theme parks??This does not mean that company earn maximum profit from visitors of theme park. Then how it is supporting the Analyst's criticism which is the company's profits depends on the attendance at it's theme parks??
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by shenoydevika » Wed Feb 20, 2013 12:38 am
Heya Soumita!
So what if they do not visit theme parks??This does not mean that company earn maximum profit from visitors of theme
See, we have to support the Analyst right? So we have to take whatever the analyst says as true. The Analyst says that majority of the company's profits come from the theme parks.(Take this as true. Don't doubt it. Don't question it. Support it) So if people don't go to the theme parks this year then the company won't earn as much profit as it did last year.. If it doesn't earn as much profits, then the Company Spokesperson's prediction is false

Better?
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by ceilidh.erickson » Wed Feb 20, 2013 11:33 am
This is a somewhat strangely-worded question. "Support the criticism of the Industry Analyst" could be interpreted to mean "support the Analyst's criticism," or it could mean "criticize the Analyst." The GMAT will almost certainly not give you a question with ambiguous wording like this.

Assuming that the author intends for us to support the Analyst's criticism, let's break down the points and see what's missing:

Premise:
Even though many overnight guests will be returning this summer, 3/4 of profits come from attendance of theme parks

Conclusion:
It's not necessarily true that the company will have a profitable quarter

Missing Information:
What will attendance of the theme parks be like? If guests are also theme park attendees, then the number of guests will likely indicate profit. If those two groups are separate, though, then number of guests will have much less of an affect on profit.

A. This would weaken, not support, the Analyst's case.

B. Irrelevant - does speak to the guests -> profit tie.

C. This doesn't add anything to the Analyst's concerns. If anything, it weakens the point.

D. This makes a comparison between summer and other seasons, which is not the point here. We're only concerned with the summer quarter. We need to know whether guests will also be theme park visitors (or whether we'll have other theme park visitors), and this tells us nothing about that.

E. This tells us that the guests of the resort are not major attendees of the theme parks. This means that the Spokesperson's connection between guests and profits is faulty, strengthening the Analyst's point.

The correct answer is E.
Ceilidh Erickson
EdM in Mind, Brain, and Education
Harvard Graduate School of Education
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