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The two divisions of a high-tech company have performed quite consistently over the past five years. In each year, the

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by AAPL » Mon Oct 26, 2026 8:51 am
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The two divisions of a high-tech company have performed quite consistently over the past five years. In each year, the telecommunications equipment division accounted for 35 percent of profits and 15 percent of revenues, and the high-speed internet division made up the balance.

Which of the following can properly be inferred regarding the past five years from the information above?

A. The telecommunications equipment division has made higher profits per dollar than the high-speed internet division

B. Sales for both divisions have remained flat over the five years

C. The high-speed-internet market involved tougher competition than the telecommunications equipment market during the past five years

D. Management devoted a greater number of company resources to the telecommunications equipment division than to the high-speed internet division over the past five years

E. More profitable products made up a higher percentage of the products offered by the telecommunications division

OA A
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Source: — Critical Reasoning |

What we see: Critical Reasoning, inference. For five years, the telecom equipment division made 35% of the company's profit from 15% of its revenue, and the internet division made the other 65% of profit from 85% of revenue. We pick the choice that must be true.

Step 1. Tell the two kinds of share apart.
What we see: telecom has 35% of profit but only 15% of revenue.
What it means: revenue is the money a division takes in. Profit is what is left after costs. Telecom keeps a much bigger slice of the profit than its slice of the sales.
What we do and why: we compare profit per dollar of sales, because these percentages let us compare the two divisions with each other, and nothing more.

Step 2. Put real numbers on it.
What we see: the shares are the same every year.
What it means: we can pick any easy totals and the comparison will hold.
What we do and why: say revenue is $100 and profit is $10. Telecom makes $3.50 profit on $15 of sales, about 23 cents per dollar. Internet makes $6.50 on $85 of sales, about 8 cents per dollar. Telecom earns almost 3 times as much profit per dollar, every year, whatever the totals.

Step 3. Keep only what the facts prove.
Telecom made more profit per dollar of sales: Step 2 proves it. This is the only choice that must be true.
B. Sales stayed flat: only the percentages stayed the same. Total sales could have grown or shrunk.
C. Tougher competition in internet: competition is never mentioned.
D. More company resources went to telecom: resources are never mentioned.
E. Telecom offered more high profit products: product mix is never mentioned. Telecom could earn more per dollar for other reasons, such as lower costs or higher prices.

The trap: B. "Performed quite consistently" sounds like "sales stayed the same." But the passage only says the split stayed the same. The company could double its sales and still split them 15% and 85%.
Faster way: Profit share bigger than revenue share means more profit per dollar. Every other choice brings in something the passage never mentions (total sales, competition, resources, products), so it cannot be proven.
Takeaway: When a passage gives a percent of profit and a percent of revenue, the safe conclusion compares profit per dollar of revenue. Those percentages never tell you the totals.

Answer: A
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