📊 GMAT Exam Prep

Source 1 (Company Press Release): 'Our innovative new product launch has been a resounding success, capturing a significant market share and exceeding initial sales forecasts by 20% in the first quarter.' Source 2 (Internal Financial Report Excerpt): 'Despite higher-than-expected sales volume for the new product, the associated marketing and distribution costs were 35% above budget, leading to a net loss on the product line for the quarter.' Which of the following statements is best supported by *both* sources?

A The company's overall profitability increased in the first quarter.
B The new product generated a substantial positive cash flow for the company.
C The new product achieved high sales volume but was not profitable in the first quarter.
D The company will discontinue the new product due to its financial performance.

✓ Correct Answer: Option C

Source 1 indicates high sales ('exceeding initial sales forecasts'). Source 2 confirms high sales ('higher-than-expected sales volume') but states it resulted in a 'net loss'. Both support high sales but unprofitability.

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