Multiple choice

Directions: For this question, select the best of the answer choices given.

Holden's Ltd. two subsidiaries performed with remarkable consistency over the past five years: in each of those years, Lexton has accounted for roughly 30 percent of dollar sales and 60 percent of profits, and Stillmore for the balance. Which of the following can properly be inferred regarding the past five years from the statement above?

  1. Total dollar sales for each of the subsidiaries have remained roughly constant.

  2. Lexton has faced stiffer competition in its markets than has Stillmore.

  3. Stillmore has realized lower profits per dollar of sales than has Lexton.

  4. The product mix offered by each of the company's divisions has remained unchanged.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The best answer is (3). If Lexton has accounted for roughly 30 percent of dollar sales and 60 percent of profits, then it has realized more profit per dollar of sales than Stillmore. There are not enough facts to support the inferences reached in the other answers.

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