Shareholder: The company’s current operations are time-proven successes. The move into food services may siphon off funds needed by these other operations. Also, the food service industry is volatile, with a higher inherent risk than with, for instance, pharmaceuticals, another area into which the company has considered expanding.
Summary
Current operations are successful. Moving into food services may take away funds needed by other operations. Moreover, the food service industry is volatile and has a higher risk than pharmaceuticals. The company has considered expanding into pharmaceuticals.
Strongly Supported Conclusions
Moving into food services would be a greater risk for the company compared to moving into pharmaceuticals.
A
The company’s present operations require increased funding.
This answer is unsupported. The shareholder tells us that current operations are a success.
B
Investment into pharmaceuticals would not siphon off money from other operations.
This answer is unsupported. We don’t know from the stimulus whether pharmaceuticals would not require funds to be taken from other operations. We know that expansion into food services would, but this does not imply that pharmaceuticals would not.
C
The company will lose money as it expands into the food service industry.
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 is risker than a move into pharmaceuticals.
D
Only if the company expands its operations into pharmaceuticals are increased profits possible.
This answer is unsupported. We don’t know from the stimulus whether expansion into pharmaceuticals is a necessary condition for the company to increase their profits.
E
The company has a greater chance of losing money in food services than in pharmaceuticals.
This answer is strongly supported. We know from the stimulus that food service is volatile and risker than moving into pharmaceuticals. Therefore, since it is a risker expansion, food service represents a greater chance of losing money.