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Flexible bonuses

by bhumika.k.shah » Mon Feb 15, 2010 9:09 am
Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent return on stockholders' investments in the company. Higher profits mean higher bonuses. Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR.The conclusion above depends on the assumption that

(A) the firm will have relatively low profits in recession years

(B) the amount represented by a ten percent return on stockholders' investments in the company will increase from year to year

(C) profits rarely exceed a ten percent return on stockholders' investments in the company

(D) profits in excess of a ten percent return on stockholders' investments in the company are all distributed in the form of bonuses

(E) bonuses at DSR never drop to zero

Whats wrong in A,D and E ?
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by onedayi'll » Mon Feb 15, 2010 9:42 am
I'll go with E, there's a close call b/w E and A.

A is clearly mentioned in the passage "bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits ". Hence, A is just a rephrase of the already stated sentence. Then, how can it be an assumption?

E because it can be very well assumed that the bonuses never drop to zero even though it could be less in recession years. E, thus, gives a strong reason to be the answer.

What's OA?
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by amazonviper » Tue Feb 16, 2010 8:27 pm
bhumika.k.shah wrote:Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent return on stockholders' investments in the company. Higher profits mean higher bonuses. Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR.The conclusion above depends on the assumption that

(A) the firm will have relatively low profits in recession years

(B) the amount represented by a ten percent return on stockholders' investments in the company will increase from year to year

(C) profits rarely exceed a ten percent return on stockholders' investments in the company

(D) profits in excess of a ten percent return on stockholders' investments in the company are all distributed in the form of bonuses

(E) bonuses at DSR never drop to zero

Whats wrong in A,D and E ?
IMO A as well.
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by komal » Sat Feb 20, 2010 11:21 pm
bhumika.k.shah wrote:Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent return on stockholders' investments in the company. Higher profits mean higher bonuses. Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR.The conclusion above depends on the assumption that

passage says : Higher profits mean higher bonuses
which implies : Lower profits mean lower bonuses
passage says : general recession mean lower bonuses.

Hence it is only logical to say general recession means lower profits. This fills the gap between the premise and the conclusion.

(A) the firm will have relatively low profits in recession years
Correct : This can be correctly assumed from the passage above and from the paraphrase.

(B) the amount represented by a ten percent return on stockholders' investments in the company will increase from year to year
Incorrect : We cannot assume this from the stimulus

(C) profits rarely exceed a ten percent return on stockholders' investments in the company
Incorrect : Nothing in the passage leads to this assumption.

(D) profits in excess of a ten percent return on stockholders' investments in the company are all distributed in the form of bonuses
Incorrect : Passage does not say ALL profit is distributed in the form of bonuses.

(E) bonuses at DSR never drop to zero
Incorrect : Size zero :oops: !! ...... completely out of scope !

Whats wrong in A,D and E ?
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by gmatmachoman » Sat Feb 20, 2010 11:37 pm
bhumika.k.shah wrote:Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent return on stockholders' investments in the company. Higher profits mean higher bonuses. Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR.The conclusion above depends on the assumption that

(A) the firm will have relatively low profits in recession years

(B) the amount represented by a ten percent return on stockholders' investments in the company will increase from year to year

(C) profits rarely exceed a ten percent return on stockholders' investments in the company

(D) profits in excess of a ten percent return on stockholders' investments in the company are all distributed in the form of bonuses

(E) bonuses at DSR never drop to zero

Whats wrong in A,D and E ?
This is a trickily worded question. I would rate it has 3/5.

Coming to options IMO C would be the right assumption.

Here we are supposed to link the premises to reach the conclusion.

Author says, Bonus is linked to profits and profits are linked to return on stockholders' investments in the company.

Now , the conclusion states Bonus is lesser in recession periods. How can we say that???

C rightly points that profits rarely exceed a ten percent return on stockholders' investments in the company.

Then U may ask me WHAT ABOUT A?? A says: the firm will have relatively low profits in recession years. Let me bring in a case here.
Let us assume 70 % of revenues be the profit made by DSY in the previous peak year.ow tis year in economic recession, the profits can be lesser ,say 50 % of total revenues & lesser than previous year's profits also. But it does not mean "It is certainly lesser than returns on stockholders' investments".

We are trying to map the Bonus with profits which inturn mapped with returns on stockholders' investments.

SO C is the best assumption. This is IMO!![spoiler][/spoiler]
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by bhumika.k.shah » Sun Feb 21, 2010 6:47 am
Gee sowree gmatmachoman ,

The OA is A

At first even i thought it was C .

But then realised thts out of scope.

Only A fits well
gmatmachoman wrote:
bhumika.k.shah wrote:Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent return on stockholders' investments in the company. Higher profits mean higher bonuses. Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR.The conclusion above depends on the assumption that

(A) the firm will have relatively low profits in recession years

(B) the amount represented by a ten percent return on stockholders' investments in the company will increase from year to year

(C) profits rarely exceed a ten percent return on stockholders' investments in the company

(D) profits in excess of a ten percent return on stockholders' investments in the company are all distributed in the form of bonuses

(E) bonuses at DSR never drop to zero

Whats wrong in A,D and E ?
This is a trickily worded question. I would rate it has 3/5.

Coming to options IMO C would be the right assumption.

Here we are supposed to link the premises to reach the conclusion.

Author says, Bonus is linked to profits and profits are linked to return on stockholders' investments in the company.

Now , the conclusion states Bonus is lesser in recession periods. How can we say that???

C rightly points that profits rarely exceed a ten percent return on stockholders' investments in the company.

Then U may ask me WHAT ABOUT A?? A says: the firm will have relatively low profits in recession years. Let me bring in a case here.
Let us assume 70 % of revenues be the profit made by DSY in the previous peak year.ow tis year in economic recession, the profits can be lesser ,say 50 % of total revenues & lesser than previous year's profits also. But it does not mean "It is certainly lesser than returns on stockholders' investments".

We are trying to map the Bonus with profits which inturn mapped with returns on stockholders' investments.

SO C is the best assumption. This is IMO!![spoiler][/spoiler]
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by gmatmachoman » Sun Feb 21, 2010 7:33 am
OMG...shame on me..How did i MISSED that one...??

AT this point in my prep........OMG....!!!
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by bhumika.k.shah » Sun Feb 21, 2010 7:35 am
Chill Govi,

When you tend to do toooo difficult sums nah , u tend to miss out the most easiest ones ...trust me .

we are all here to learn after all.

hope u find komal's post helpful :-)
gmatmachoman wrote:OMG...shame on me..How did i MISSED that one...??

AT this point in my prep........OMG....!!!
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by shashank.ism » Sun Feb 21, 2010 9:27 am
bhumika.k.shah wrote:Chill Govi,

When you tend to do toooo difficult sums nah , u tend to miss out the most easiest ones ...trust me .

we are all here to learn after all.

hope u find komal's post helpful :-)
gmatmachoman wrote:OMG...shame on me..How did i MISSED that one...??

AT this point in my prep........OMG....!!!
Hopefully we are all here to learn and not console each other...so better don't give a chill pill rather encourage him to do lesser mistake...
komal's post is always helpful...Also ur post always says..."Hope this helps" ..well many people are still hoping even the moderators and makers of BTG...thanks
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by onedayi'll » Mon Feb 22, 2010 11:27 am
komal wrote:
bhumika.k.shah wrote:Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent return on stockholders' investments in the company. Higher profits mean higher bonuses. Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR.The conclusion above depends on the assumption that

passage says : Higher profits mean higher bonuses
which implies : Lower profits mean lower bonuses
passage says : general recession mean lower bonuses.

Hence it is only logical to say general recession means lower profits. This fills the gap between the premise and the conclusion.

(A) the firm will have relatively low profits in recession years
Correct : This can be correctly assumed from the passage above and from the paraphrase.

(B) the amount represented by a ten percent return on stockholders' investments in the company will increase from year to year
Incorrect : We cannot assume this from the stimulus

(C) profits rarely exceed a ten percent return on stockholders' investments in the company
Incorrect : Nothing in the passage leads to this assumption.

(D) profits in excess of a ten percent return on stockholders' investments in the company are all distributed in the form of bonuses
Incorrect : Passage does not say ALL profit is distributed in the form of bonuses.

(E) bonuses at DSR never drop to zero
Incorrect : Size zero :oops: !! ...... completely out of scope !

Whats wrong in A,D and E ?



Komal,
I'm confused here......... If a statement can be easily assumed from passage then how can it be an assumption?
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by onedayi'll » Mon Feb 22, 2010 11:30 am
Some please tell me why A????

I'm unable to understand this... :(
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by komal » Mon Feb 22, 2010 11:30 am
onedayi'll wrote:
Komal,
I'm confused here......... If a statement can be easily assumed from passage then how can it be an assumption?

Lets put it this way..... The conclusion is based on this assumption.
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by paddle_sweep » Wed Apr 28, 2010 8:03 am
What's the problem with 'E'?
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