A company plans to expand into marine salvage, concentrating on a stretch of Country Y coastal waters that was a...
GMAT Critical Reasoning : (CR) Questions
A company plans to expand into marine salvage, concentrating on a stretch of Country Y coastal waters that was a busy seventeenth-century shipping lane, which is thought to have several shipwrecks containing coins and other valuable objects. Country Y's government is willing to issue permits for the salvage jobs, and estimates put salvage costs at only 40 percent of the projected gross sales of the recovered objects. Moreover, the work has the support of archaeologists and thus will not be slowed by lawsuits.
Which of the following would, if true, most weaken the company's plans to profit from shipwreck salvage?
Passage Analysis:
| Text from Passage | Analysis |
| A company plans to expand into marine salvage, concentrating on a stretch of Country Y coastal waters that was a busy seventeenth-century shipping lane, which is thought to have several shipwrecks containing coins and other valuable objects. |
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| Country Y's government is willing to issue permits for the salvage jobs, and estimates put salvage costs at only 40 percent of the projected gross sales of the recovered objects. |
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| Moreover, the work has the support of archaeologists and thus will not be slowed by lawsuits. |
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Argument Flow:
The argument builds a case for why the marine salvage plan should succeed by stacking up favorable conditions. It starts with the basic opportunity (valuable shipwrecks), then adds government approval and strong profit margins, and finally removes the threat of legal delays.
Main Conclusion:
The company's marine salvage expansion plan appears highly viable and profitable based on the favorable conditions present.
Logical Structure:
The argument uses cumulative evidence structure - each premise adds another reason why the plan should work. The government permits remove legal barriers, the \(40\%\) cost ratio ensures profitability, and archaeologist support prevents delays. Together, these premises support that the salvage venture will be successful.
Prethinking:
Question type:
Weaken - We need to find information that would reduce belief in the company's ability to profit from shipwreck salvage
Precision of Claims
The argument makes specific claims about permits being available, costs being only \(40\%\) of projected sales, and archaeologist support preventing lawsuits. The conclusion assumes profitable salvage operations.
Strategy
Look for new information that would make the salvage venture unprofitable or unfeasible, while respecting the given facts about permits, cost estimates, and archaeologist support. Focus on gaps in the argument - what could go wrong that isn't addressed?
This tells us that coins were only a small percentage of seventeenth-century cargoes by volume. However, this doesn't weaken the plan because the argument mentions 'coins and other valuable objects.' Even if coins were a small volume percentage, they could still be extremely valuable per unit, and the 'other valuable objects' could provide the bulk of the projected sales value. Volume doesn't directly correlate to monetary value for antique objects.
The fact that deep-sea salvage operations can cost up to \(\$80{,}000\) per day provides cost information but doesn't necessarily weaken this specific plan. The argument already accounts for costs by stating they're estimated at \(40\%\) of projected gross sales. This daily cost figure doesn't contradict that percentage-based estimate, and we don't know if this particular salvage operation would classify as 'deep-sea' or how many days it would take.
The company's maritime salvage experience coming entirely from ocean-mining might suggest less relevant experience, but this doesn't strongly weaken the profit projections. Ocean-mining involves similar underwater operations and technology, so the experience could be transferable. More importantly, this doesn't address the fundamental economics or feasibility factors outlined in the argument.
The \(\$50{,}000\) cost for remote-operated robotic research vehicles is just one expense item. Like choice B, this doesn't contradict the overall cost estimate of \(40\%\) of gross sales. The argument already accounts for salvage costs in its projections, so knowing one specific equipment cost doesn't change the overall economic calculation presented.
This is the correct answer because it fundamentally changes the profit equation. The argument bases its optimism on costs being only \(40\%\) of projected gross sales, implying a \(60\%\) profit margin. However, a \(50\%\) tax on gross sales would mean total expenses (\(40\% + 50\% = 90\%\) of gross sales), leaving only \(10\%\) profit. This dramatically weakens the attractiveness of the salvage venture and directly undermines the company's plans to profit from the operation.