PT127.S3.Q2

PrepTest 127 - Section 3 - Question 2

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Shareholder: The company's current operations are time-proven successes. ███ ████ ████ ████ ████████ ███ ██████ ███ █████ ██████ ██ █████ █████ ███████████ █████ ███ ████ ███████ ████████ ██ █████████ ████ █ ██████ ████████ ████ ████ █████ ███ █████████ ████████████████ ███████ ████ ████ █████ ███ ███████ ███ ██████████ ██████████

Summary

If the company moves into food services, that could take away funds needed by other, currently successful operations. Moreover, the food service industry is volatile. Food service is riskier than pharmaceuticals, where company has also considered expanding.

Strongly Supported Conclusions

Moving into food service would create some risk of the company becoming less profitable.

Moving into food services would be a greater risk for the company compared to moving into pharmaceuticals.

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2.

If the shareholder's statements are █████ █████ ███ ██ ███ █████████ ██ ████ ████████ █████████ ██ █████

a

The company's present ██████████ ███████ █████████ ████████

This answer is unsupported. The only thing that the shareholder tells us about current operations is that they're successful. We have no idea whether they're currently adequately funded.

3%
b

Investment into pharmaceuticals █████ ███ ██████ ███ █████ ████ █████ ███████████

This answer is unsupported. We don’t know from the stimulus whether or not pharmaceuticals would require siphoning funds from other operations. We know that expansion into food services would, but this doesn't imply anything about pharmaceuticals one way or the other.

4%
c

The company will ████ █████ ██ ██ ███████ ████ ███ ████ ███████ █████████

This answer is unsupported. We don’t know from the stimulus whether the company would for a fact lose money. We only know that this move carries some possible risk.

7%
d

Only if the ███████ ███████ ███ ██████████ ████ ███████████████ ███ █████████ ███████ █████████

This answer is unsupported. The shareholder never indicates any necessary conditions for the company to increase profits. The shareholder is discussing the possible risks of moving into food service, not overall profitability.

1%
e

The company has █ ███████ ██████ ██ ██████ █████ ██ ████ ████████ ████ ██ ████████████████

This answer is strongly supported. The shareholder says that food service is volatile and risker than moving into pharmaceuticals. Since it's a risker industry, food service represents a greater chance of losing money.

85%

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