GMAT Critical Reasoning

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Source: Manhattan

Level: 3

The Hale Burton Oil Pipeline Construction Corporation has had a bad quarter. Rather than lay off workers to cut costs, however, it will simply defer salaries for 30 days and hold them in a mutual fund to pick up interest to cover expenses. By doing this the company and its employees will avoid the negative consequences often associated with earning shortfalls.

Which of the following, if true, is the best criticism of the corporation,Aos plan?

  • A Employees will not be able to control which mutual funds the salaries will be diverted into.
  • B The corporation cannot save money by cutting staff because it is already understaffed.
  • C Some employees will need to borrow money to hold them over until the 30 days are up and they will consequently have 30 days of interest on these loans.
  • D Some employees will not be affected by the rollover because they have savings.
  • E The corporation's budget was cut by 15% last year.

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