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Course of Action - Verbal and Reasoning

Directions to SolveIn each question below is given a statement followed by three courses of action numbered I, II and III. You have to assume everything in the statement to be true, then decide which of the three given suggested courses of action logically follows for pursuing.
Q1:

Statement: The Deputy Mayor of city Z has proposed to install a plant of mineral water and to supply citizen's mineral water bottles at Rs. 6 per litre as against Rs. 10 per litre being sold by local private companies. Courses of Action:
  1. The local private companies of city Z will have to close their operation.
  2. The Corporation of city Z will have to provide for losses in this project in its budget.
  3. The tap water schemes of city Z will have to be stopped.

A Only I and II follow

B Only II and III follow

C Only I and III follow

D All follow

E None of these

ANS:E - None of these

Explanation: The Corporation has planned to install its plant so as to achieve cost-effective production of mineral water. Had there been a loss, it could also acquire water from private companies. So, II does not follow. Besides, the local private companies can survive by cutting costs or by extending their sales network to other cities. Thus, I does not follow. Lastly, the Corporation seeks to provide healthy drinking water to the residents. Water for general use would still be delivered through taps. Hence, III also does not follow.