GMAT Verbal Reasoning Practice Test 5

Question : 43 of 100

Marks: +1, -0

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

the firm will have relatively low profits in recession years
the amount represented by a ten percent return on stockholders’ investments in the company will increase from year to year
profits rarely exceed a ten percent return on stockholders’ investments in the company
profits in excess of a ten percent return on stockholders’ investments in the company are all distributed in the form of bonuses
bonuses at DSR never drop to zero

Validate

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