Question: For the purpose of stimulating innovation at TechCorp, one of the company’s long-standing goals has been to obtain at least 50 percent of its annual revenues from sales of products that are no more than three years old. Last year, TechCorp achieved this goal, despite the fact that the company introduced no new products during the year.
Which of the following, if true, best explains the results described above?
(A) None of the company’s competitors introduced any new products during the last year.
(B) Scientists at the company report that they are close to breakthroughs that should result in several new products during the coming year.
(C) Sales of some of the company’s older products were discontinued during that last year.
(D) The company has introduced very few new products during the last three years.
(E) Company spending on research and development has increased sharply over the past five years.
Answer: C
Explanation
(A) None of the company’s competitors introduced any new products during the last year. The given statement is incorrect because it can’t be said that if the company didn’t produce any new product then their competitors will also not introduce the product.
(B) Scientists at the company report that they are close to breakthroughs that should result in several new products during the coming year. The given statement is incorrect because the information given in this statement is not provided in the argument. The statistics of the company as well as how the company is able to get the desired revenue is not mentioned anywhere in the given argument.
(C) Sales of some of the company’s older products were discontinued during that last year. The given statement is correct because it gives the reason that the company was able to sell their products to earn the revenue until the new products make their niche in the market.
(D) The company has introduced very few new products during the last three years. The given statement is incorrect because the statistics and any parameter to explain this statement is not provided in the argument.
(E) Company spending on research and development has increased sharply over the past five years. The given statement is incorrect because again, we don't have a factor or validation to explain the company’s last year revenue.
“For the purpose of stimulating innovation at TechCorp”- is a question of critical reasoning in a section of GMAT Verbal Reasoning. It examines the logical reasoning of the candidate in the test. The Critical Reasoning question type is used to measure critical business skills. GMAT Critical Reasoning questions assess a distinct set of qualities associated with logic. The students preparing for the GMAT will experience the argument analysis of Critical Reasoning for the first time to substantiate their logic.
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