Question

Suncorp, a new corporation with limited funds has been clearing large sections of the tropical Amazon forest for cattle ranching. This practice continues even though greater profits can be made from rubber tapping which does not destroy the forest than from cattle ranching which does destroy the forest.
Which of the following if true most helps to explain why Suncorp has been pursuing the less profitable of the two economic activities mentioned above?

• A. The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands
• B. Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates
• C. In certain districts profits made from cattle ranching are more heavily taxed than profits made from any other industry
• D. Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats
• E. The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch

Answer 1

The correct option is E The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch

Let's go through the options here to find out the correct answer. Option A does not add anything to the question that would help us decide why Suncorp has been pursuing the less profitable of the two economic activities- it describes the quality of the soil of the Amazon forest, which is not directly related to the question. This just means that the soil is equally good for rubber plants. A is thus incorrect. Option B too doesn't fit the context as climatic conditions haven't been taken to consideration in the first place. C actually states the opposite of the required answer. Option D is completely irrelevant as regards the context asked. It is only option E that fits the context because a new venture has limited funds and as in comparison cattle ranching requires less capital,it is the preferable venture.