computers

[phelps]

Don’s, a chain of supermarkets, has entered into an agreement in which Rose Computers will sell Don’s an unlimited number of its least expensive PC’s at one-fourth the regular wholesale price. In return, Don’s has agreed to purchase all of its scanners and other electronic information-processing equipment from Rose or from Omicron, Rose Computers’ parent company, for the next ten years. Don’s will offer a Rose PC free to any school that turns in Don’s register receipts totaling $100,000 within the next six months. The vice-president in charge of advertising for Don’s expects that the computer giveaway will obviate the need for a massive new advertising campaign for the next six months and that Don’s can make up the expenditures for the PC’s by writing them off its income taxes as charitable donations.
The plans formulated by Don’s assume each of the following EXCEPT:
(A) The prices that Rose or Omicron charges Don’s for information-processing equipment over the next ten years will be lower than those charged by other companies.
(B) The tax laws will not be changed to exclude or lessen the value of charitable donations as tax write-offs.
(C) Schools will be sufficiently attracted by Don’s computer giveaway offer that teachers will urge students to shop at Don’s.
(D) Rose will be able to supply Don’s with a sufficient number of PC’s to meet the demand generated by schools that collect Don’s receipts totaling $100,000.
(E) The effect of the computer giveaway offer on Don’s business will be comparable to that of a major advertising campaign.

[Vemuri]

IMO C. Don's do not assume that teacher will urge students to shop at Don's. There main intention is to use this opportunity to write off its Income Tax as charitable donations.

[phelps]

Original Answer A

[Vemuri]

Original Answer A

Do you have an explanation as to why A is correct & not C?

[SanjeevK]

IMO A: because we are not doing comparison with other companies
C is an assumption. As per option c
"Schools will be sufficiently attracted by Don’s computer giveaway offer that teachers will urge students to shop at Don’s". It is given in the stimulus that Don’s will offer a Rose PC free to any school that turns in Don’s register receipts totaling $100,000 within the next six months. If students shop at Don's, it will contribute towards receipts.

[hk]

I would choose A.

All the others are assumptions that the strategy adopted by Don's would help its business.

C is also an assumption - here the reasoning:

1. Don’s will offer a Rose PC free to any school that turns in Don’s register receipts totaling $100,000 within the next six months
2.giveaway will obviate the need for a massive new advertising campaign for the next six months

This is possible only if there are significant purchases worth $100,000 from the schools. Now the offer is - If schools turn in the receipts worth 100K the schools would get a computer. Hence it assumes that the school will encourage its students to shop at Don's.

More over the price comparison of information-processing equipment from other companies is irrelevant to the discussion and not an assumption.

[Vemuri]

Thanks guys.....that clarifies why A is the answer.

[vinaynp]

IMO A).

Explanations are good above.

[khanshainur]

I would go with option A as the correct option