This GMAT practice question is a verbal sentence correction question testing your understanding of Modifiers and Tense use.
Question 2: Reporting a 90 percent drop in net income during the second quarter, dragged down by restructuring charges and weak sales, the earnings guidance for the year was withdrawn by Best Buy Co.
Look for differences across the answer options to identify what is being tested in the sentence.
Some of the options use “reporting a 90%.... and weak sales” as a modifier in the sentence and some of the options use it as a main part of the sentence.
When this phrase is part of the main part of the sentence, the tense construction varies with some options using the progressive tense “is reporting” and some using the present perfect “has reported”.
Similarly, the verb “withdraw” has also been constructed in different tenses.
The use of the progressive tense “is reporting” would imply that the company is right now doing the action of reporting and that it is still happening. Then progressive tense would therefore, be incorrect.
The tense form for “withdraw” must match the tense for “reporting” (if “reporting..." has not been used as a modifier) because the actions are related and happened at the same time.
If “reporting a 90%.... and weak sales” is used as a modifier, it has to refer to the company because the company is doing the action of reporting.
Choice (A) is incorrect because the modifier “reporting a 90%.... and weak sales” refers to “the earnings guidance” and not to “Best Buy Co.”.
Choices (B) and (E) can be eliminated for the use of the progressive tense “is reporting”. Also, in both sentences, the verbs “withdrew” and “has withdrawn” imply that the action of withdrawing is completed. However, the verb “is reporting” leads to the impression that the action is yet to happen. This conflict in verb tense causes ambiguity in meaning.
Choice (C) uses the construction “reporting... and dragged down”. The usage of the conjunction “and” implies that there are two reasons for the withdrawal of the earnings guideline. However, this construction does not make sense because the company cannot be dragged down by restructuring charges. Rather, it is the “net income” that is dragged down. The change in the intent of the sentence is the reason to eliminate the option.
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