In each question below is given a statement followed by two courses of action…
2023
In each question below is given a statement followed by two courses of action numbered I and II. You have to assume everything in the statement to be true and on the basis of the information given in the statement, decide which of the suggested courses of action logically follow(s) for pursuing.
Statement: Since its launching in 1981, Vayudoot has so far accumulated losses amounting to Rs 153 crore.
Courses of Action:
I. Vayudoot should be directed to reduce wasteful expenditure and to increase passenger fare.
II. An amount of about Rs 300 crore should be provided to Vayudoot to make the airliner economically viable.
- A.
Only I follows
- B.
Only II follows
- C.
Either I or II follows
- D.
Neither I nor II follows
Attempted by 6 students.
Show answer & explanation
Correct answer: A
Answer: Only the course suggesting reduction of wasteful expenditure and increase of passenger fares follows.
Explanation:
Why reducing costs and increasing fares follows: The reported accumulated losses indicate that expenses exceed revenues. Reducing wasteful expenditure addresses the cost side, and increasing passenger fares increases revenue. Both are directly relevant and logical steps to reduce losses.
Why providing Rs 300 crore does not follow: The statement gives no information on the causes of the losses, the amount required to restore viability, or how the funds would be used. Proposing a specific bailout amount is arbitrary based on the information provided and does not logically guarantee economic viability.
Conclusion: Only the action to reduce wasteful expenditure and increase passenger fares follows from the statement; the proposal to provide Rs 300 crore is not justified by the given information.