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The flowchart shows the process that a certain business in Nation X must follow to determine which one of three...

GMAT Graphics Interpretation : (GI) Questions

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Flowchart diagram showing tax determination process

The flowchart shows the process that a certain business in Nation X must follow to determine which one of three types of tax (shipping-address tax, billing-address tax, or 0% tax) must be applied to international shipments (orders shipping to destinations outside of Nation X). Any shipping-address tax or billing-address tax applied is greater than 0%.


Select from each drop-down menu the option that completes the statement so that it most accurately reflects the information provided.

For orders from this business, atax must be applied to each international shipment for which there is.
Solution

Owning The Dataset

Table 1: Text Analysis

Text Component Literal Content Simple Interpretation
Business Location a certain business in Nation X The business is based in Nation X
Applicability ...to determine which one of three types of tax...must be applied to international shipments... The flowchart is for deciding tax on international orders
Tax Types shipping-address tax, billing-address tax, or 0% tax There are three possible taxes: shipping-address, billing-address, or zero
Tax Amount Any shipping-address tax or billing-address tax applied is greater than 0% Nonzero taxes (shipping or billing) if applied
International shipment definition orders shipping to destinations outside of Nation X Only shipments outside the business's own country are affected

Table 2: Chart Analysis

Chart Component What's Shown What This Tells Us
Chart Type Decision flowchart with 4 diamonds, 5 rectangles The process is a series of decisions and actions
Initial Decision Node Did customer specify a separate shipping address? This starts the process, splitting paths by address used
Middle Decisions Will the destination country impose a tax? (twice) Either address path checks if the country requires tax
Responsibility Check Is the shipper responsible for applying the tax? (twice) Business must check if it's responsible for collecting tax
End Actions Apply 0% tax/apply billing-address tax/apply shipping-address tax Final taxes applied depend on previous answers
Number of 0% Tax Outcomes 0% tax is reached from four different decision sequences Most scenarios lead to no tax being applied
Path Symmetry Each address type follows the same logic after split Both address types lead through equivalent sub-decisions

Key Insights

  1. 0% tax is applied whenever either the destination country does not impose tax or the business isn't required to collect it; this is the most common outcome with multiple unique decision paths.
  2. Nonzero tax (shipping-address or billing-address) is applied only if both the destination country imposes tax and the shipper is responsible; the type (shipping or billing) is determined entirely by whether a separate shipping address was specified at the start.
  3. The flowchart's structure shows that address selection matters only at the initial step, and both resulting paths follow identical logic before converging on applying 0% tax or the relevant tax based on the address type.

Step-by-Step Solution

Question 1: Determining the Type of Tax Applied

Complete Statement:

For orders from this business, a [BLANK 1] tax must be applied to each international shipment for which there is [BLANK 2].

Breaking Down the Statement
  • Statement Breakdown 1:
    • Key Phrase: a [BLANK 1] tax must be applied
      • Meaning: The tax type needs to be identified (billing-address, shipping-address, or 0%).
      • Relation to Chart: These are the three possible end outcomes shown in the flowchart for tax determination.
      • Important Implications: The tax type is contingent on conditions specified in the flowchart and depends on what is in Blank 2.
  • Statement Breakdown 2:
    • Key Phrase: each international shipment
      • Meaning: Applies to all international shipments made by the business.
      • Relation to Chart: All decisions in the flowchart are for international shipments.
      • Important Implications: Domestic shipments are not being considered.
  • What is needed: We need to select which tax type (billing-address, shipping-address, or 0%) is applied under a particular condition.
Solution:
  • Condensed Solution Implementation:
    Follow the flowchart to determine under which condition the exact tax type is always 0%, regardless of address configuration.
  • Necessary Data points:
    The flowchart shows that if the destination country does not impose a tax on the shipment, both the 'billing-address' and 'shipping-address' scenarios immediately lead to a 0% tax.
    • Calculations Estimations: No calculation is necessary. Only a logical evaluation of flowchart branches.
    • Comparison to Answer Choices: The only tax type that is guaranteed by a single condition is 0%, which is triggered whenever the destination country does not impose tax. Therefore, 0% is the correct answer for Blank 1.
FINAL ANSWER Blank 1: 0%

Question 2: Identifying the Trigger Condition for 0% Tax

Complete Statement:

For orders from this business, a 0% tax must be applied to each international shipment for which there is [BLANK 2].

Breaking Down the Statement
  • Statement Breakdown 1:
    • Key Phrase: a 0% tax must be applied
      • Meaning: We have already determined that when 0% tax is applied, we are looking at a unique flowchart path.
      • Relation to Chart: Both 'billing-address' and 'shipping-address' branches converge to 0% tax if the destination country does not impose a tax.
  • Statement Breakdown 2:
    • Key Phrase: for which there is [BLANK 2]
      • Meaning: Identifies which condition must be present for a 0% tax to always result.
      • Relation to Chart: This must match a flowchart decision that directly leads to 0% tax regardless of address choices.
  • What is needed: The condition, from the flowchart or answer choices, that results in 0% tax for all international shipments from this business.
Solution:
  • Condensed Solution Implementation:
    Looking at the flowchart: whenever the destination country does not impose tax, both main branches terminate in 0% tax.
  • Necessary Data points:
    Key flowchart node: 'Will the destination country impose a tax?' If 'No', immediately apply 0% tax regardless of address.
    • Calculations Estimations: No calculation is involved, only logical deduction.
    • Comparison to Answer Choices: The only answer that fulfills this requirement is 'no tax imposed by the destination country.' The other options do not guarantee 0% tax in all address-type situations.
FINAL ANSWER Blank 2: no tax imposed by the destination country

Summary

The core relationship in the flowchart is that 0% tax is universally applied whenever the destination country does not impose any tax, regardless of address configuration. This makes 0% the only correct answer for Blank 1, and 'no tax imposed by the destination country' the only correct answer for Blank 2.

Question Independence Analysis

The two questions are not independent: the specific condition in Blank 2 ('no tax imposed by the destination country') uniquely determines that the tax type in Blank 1 must be 0%. Thus, filling in one blank immediately determines the other.

Answer Choices Explained
For orders from this business, a
1A
billing-address
1B
shipping-address
1C
0%
tax must be applied to each international shipment for which there is
2A
a tax imposed by the destination country
2B
no tax imposed by the destination country
2C
no separate shipping address specified
.
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