Question
With seventeen casinos, Moneyland operates the most casinos in a certain state. Although intent on expanding, it was outmaneuvered by Apex Casinos in negotiations to acquire the Eldorado chain. To complete its acquisition of Eldorado, Apex must sell five casinos to comply with a state law forbidding any owner to operate more than one casino per county. Since Apex will still be left operating twenty casinos in the state, it will then have the most casinos in the state.
Which of the following, if true, most seriously undermines the prediction?
Option A
Option B
Option C
Option D
Option E
(This question is from Official Guide. Therefore, because of copyrights, the complete question cannot be copied here. The question can be accessed at GMAT Club)
Solution
Understand the Passage
With seventeen casinos, Moneyland operates the most casinos in a certain state.
Moneyland operates more casinos than any other player in a certain state. The statement implies that every other player in the state has fewer than 17 casinos.
Although intent on expanding, it was outmaneuvered by Apex Casinos in negotiations to acquire the Eldorado chain.
Even though Moneyland wanted to acquire Eldorado chain of casinos, Apex Casinos beat it in the negotiations i.e. Apex Casinos is buying Eldorado chain of casinos.
To complete its acquisition of Eldorado, Apex must sell five casinos to comply with a state law forbidding any owner to operate more than one casino per county.
There is a state law that prohibits any chain to have more than one casino in a county. The statement implies that Apex and Eldorado both have casinos in five counties. Thus, to comply with the law, Apex will have to sell five casinos.
(A natural question that came up in my mind as I read this statement was ‘why Apex must sell?’. Why can’t it simply close those five or at least some of those five casinos? Even though, in this specific argument, this question doesn’t matter, I wanted to mention the question because I believe such questions should arise in a person’s mind as he reads the argument. We need to be active readers, who question things, not passive readers, who read just to remember.)
Since Apex will still be left operating twenty casinos in the state, it will then have the most casinos in the state.
Even after selling five casinos, Apex will still have 20 casinos. (Since 20 casinos is more than 17 casinos of Moneyland, which had the most casinos till now,) Apex will have the most casinos in the state.
Predict an Answer
The argument says that since the greatest number of casinos with any chain is 17 now, Apex Casinos will have the greatest number of casinos once it has 20 casinos.
One of the assumptions underlying the argument is that by the time Apex completes its acquisition of Eldorado, Moneyland will not have opened more than three new casinos on top of its existing ones.
If Moneyland ends up opening 4 or more casinos in the meantime, Apex, with 20 casinos, will not have the most casinos in the state.
Option Analysis
(A) Correct. Since we are given the Apex must sell five casinos to comply with the law and, from this option, we can see that Moneyland will be the only buyer, the option leads to a situation in which Moneyland will have 22 casinos before the acquisition of Eldorado by Apex is complete. In such a situation, Apex Casinos, with 20 casinos, will not have the most casinos in the state.
Thus, this option significantly weakens the argument.
(B) Incorrect. How much renovation will be required for Eldorado’s or Apex’s casinos or whether they will remain profitable does not impact the argument. The argument is about which chain will have the most casinos, not about which chain will be more profitable.
(C) Incorrect. The presence of such counties has no bearing on the argument. The argument is not concerned with whether all or even most counties allow casinos. Whether all counties allow casinos or only a few allow casinos, the argument remains unimpacted.
(D) Incorrect. Majority means more than 50%. The option says that Moneyland operates casinos in more than 50% of the counties. This means that 17 is greater than 50% of the number of the counties in Moneyland. However, the argument still stand as is. If Apex gets 20 casinos, it’ll have more casinos than Moneyland and thus the most casinos in the state.
(E) Incorrect. How Apex uses sales proceeds from the sale of five casinos has no bearing on the argument. Whether Apex uses such funds to fund the acquisition or to give a fully-paid vacation to its top management doesn’t have any impact on its number of casinos and thus any impact on the argument.
Tricky question. I was trying to show how Apex would reduce its casinos – did not realize by selling to Moneyland !!
For option A, what if Moneyland had casinos in 2 or more counties in which both Apex & Eldorado had casinos? Then it wouldn’t be able to buy and wouldn’t be the largest…
In such a case, Apex will not be able to complete its acquisition of Eldorado since it ‘must’ sell five casinos, but there’ll be no buyer.
Leave a comment