Hotco oil burners, designed to be used in asphalt
plants, are so efficient that Hotco will sell one to the
Clifton Asphalt plant for no payment other than the
cost savings between the total amount the asphalt
plant actually paid for oil using its former burner
during the last two years and the total amount it will
pay for oil using the Hotco burner during the next two
years. On installation, the plant will make an estimated
payment, which will be adjusted after two years to
equal the actual cost savings.
Which of the following, if it occurred, would constitute
a disadvantage for Hotco of the plan described above?
(A) Another manufacturer’s introduction to the
market of a similarly efficient burner
(B) The Clifton Asphalt plant’s need for more than
one new burner
(C) Very poor efficiency in the Clifton Asphalt plant’s
old burner
(D) A decrease in the demand for asphalt
(E) A steady increase in the price of oil beginning
soon after the new burner is installed作者: judyenglishS 时间: 2011-1-20 21:21
A Th e burner is already installed, so a competitor is not a problem.
B Th e plant’s need for multiple burners should be an opportunity for Hotco, not a disadvantage.
C If the old burner was very inefficient, the new burner should save a great deal of money that
would ultimately go to Hotco.
D If demand decreases, less oil would need to be purchased, and Hotco would get more money.
E Correct. Th is statement properly identifies a factor that would constitute a disadvantage for the
plan: since the payment for the burner is based on savings in oil purchases, any increases in the
price of oil will decrease savings and thus decrease payments to Hotco.
Th e correct answer is E.作者: Fuckitup 时间: 2011-1-21 06:56
