MGMAT IR - confusing question

[gmatwork]

Email from executive director to charity staff
May 5, 3:14 p.m.

Our annual Grand Ball and Silent Auction will be on October 12th this year. The venue has a maximum capacity of 1,098 people (including servers and other workers).
We need to determine how to maximize attendance while not going over the capacity limit. In addition, I’d like to offer 100 lots for auction, and we will be running a
pledge table again this year. Our goal is to raise a total of $250,000 from the auction and pledges combined.

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Email from auction coordinator in response to the director’s May 5, 3:14 p.m. message
May 6, 9:33 a.m.

Last year, we invited 1,813 people and 1,492 accepted. Of those, 1,378 actually attended. We could probably plan on similar response and attendance rates this year.
All of the companies who gave items to be auctioned last year are donating again this year, except for 2, so that accounts for 56 lots. In addition, my team has already
secured an additional 12 items for the auction; I’m certain we can reach 100 items. Last year, we raised $131,000 from pledges made during the event and the auction
brought in an additional $73,000. This year’s lots should go for about the same price on average, so the 42 additional auction lots this year should be enough to raise the
additional $50,000 needed.

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Email from executive director to auction coordinator in response to the auction coordinator’s May 6, 9:33 a.m. message
May 9, 12:48 p.m.

Maybe we should think about moving to a larger venue so we make sure that we don’t exceed the capacity limit. Last Saturday night, the opera’s benefit gala was almost
shut down because they had too many people. Assume that about 10% of the people will be servers and other workers. We would lose our deposit though. Well, if our
projections are accurate, we should be fine at this venue.

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(1) Consider each of the following statements. Indicate Yes if the information in the three emails support the statement; otherwise, indicate No.

Yes No
i The executive director would rather change to a larger venue than risk exceeding the capacity of the currently-booked venue.

ii The auction coordinator believes that the charity will be able to reach its goal to raise $250,000 at this year’s event.

iii The auction coordinator is certain that the charity has the necessary data to determine how many people to invite in order to maximize attendance while not exceeding the capacity limit.


For this question, I can't understand how the answer to statement 1 should be NO.

In message 3 from question stem -

Looking at the statement - "Maybe we should think about moving to a larger venue so we make sure that we don’t exceed the capacity limit." ....it really looks like the Director is willing to make a change of location. The last statement of the same message - "Well, if our
projections are accurate, we should be fine at this venue."

When the director says that we should be fine with the venue, this is only contingent upon the accuracy of the projections. I don't understand how the answer to Statement 1 is NO.

[tim]

the director is definitely taking a risk by relying on projections - remember projections are not certainties, and there is a chance the capacity could be exceeded. thus it is clear from 3 that the director is willing to take the risk, in other words it is NOT true that the director would rather seek a larger venue rather than taking the risk..

[jarrett]

That seems like quite a nuanced answer given that this question is marked "easy."

[RonPurewal]

That seems like quite a nuanced answer given that this question is marked "easy."

There's really no benefit in thinking about "difficulty" labels. You're better off ignoring them entirely.