A global telecommunications company, in its 2022 annual report, revealed that three of its four divisions turned a profit, a significant improvement from the previous year when only the Asian division reported positive earnings. The Chief Executive Officer attributed this success to a new initiative focused on enhancing customer service in previously neglected regions.

Which of the following, if true, would most seriously undermine the CEO's assertion regarding the reasons for the company's improved financial results?

Answer Choices

Correct answer marked below

The telecommunications company launched several new customer service centers in previously neglected regions last year.

The company's established markets did not see any significant changes in revenue or expenses.

The finance department implemented a new accounting policy that recognizes revenue from transactions that would have been recorded in the next fiscal year.

Correct

There will be fewer job cuts in the underperforming divisions because a new labor agreement permits the company to lower salaries by fifteen percent to ease financial pressures.

Three years ago, all four divisions of the company achieved or surpassed the average profit margins of the top fifty telecommunications firms.

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Explanation

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Official Explanation

Official

To determine which statement most seriously undermines the CEO's claim, we need to analyze the options. The CEO claims that the improved financial performance is due to a new initiative focused on customer service in neglected regions. If the accounting department applied a new policy that allows them to recognize revenue earlier, this could explain the increase in profits without…

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Comments

PratikMar 25, 2025

Great

RyanFeb 12, 2024

good question

NguyenSep 13, 2024

thanks for posting

What this question tests

What it tests

Whether you can identify the option that most undermines an argument's conclusion.

Common trap

Choosing an irrelevant objection or one that attacks the premise rather than the reasoning.