### Tab 1: Innovation Grant Policy The Green Tech Foundation awards annual research grants… — GMAT

### Tab 1: Innovation Grant Policy
The Green Tech Foundation awards annual research grants to clean-energy startups. To qualify for a grant, a startup must allocate at least $40\%$ of its annual operating budget to solar or wind energy research.

*Exception:* Startups headquartered in designated rural zones qualify for grant funding regardless of their research focus area, provided their total annual operating budget does not exceed $\$150,000$ .

### Tab 2: Applicant Profiles
- Helios Inc.: Headquartered in an urban zone; total annual operating budget of $\$200,000$ , with $\$90,000$ allocated to solar energy research.
- AeroWind Ltd.: Headquartered in a rural zone; total annual operating budget of $\$180,000$ , with $\$30,000$ allocated to wind energy research.
- BioTerra Co.: Headquartered in a rural zone; total annual operating budget of $\$120,000$ , with $\$20,000$ allocated to biomass energy research.

### Tab 3: Funding Allocation Rules
Approved applicants receive grant funding equal to $50\%$ of their total annual operating budget, up to a maximum cap of $\$100,000$ per startup.

Based on the information provided across the three tabs, which of the following choices correctly evaluates the truth value (True or False) of each statement below?

1. Helios Inc. qualifies for the innovation grant under the standard policy rules.
2. AeroWind Ltd. qualifies for the innovation grant under the rural zone policy exception.
3. If approved, BioTerra Co. will receive exactly $\$60,000$ in grant funding.

Statement 1: True; Statement 2: False; Statement 3: TrueAnswer
B
Statement 1: True; Statement 2: True; Statement 3: True
C
Statement 1: False; Statement 2: False; Statement 3: True
D
Statement 1: True; Statement 2: False; Statement 3: False
E
Statement 1: False; Statement 2: True; Statement 3: False

Answer

Statement 1 is True; Statement 2 is False; Statement 3 is True.

The correct combination is Statement 1: True, Statement 2: False, Statement 3: True. Helios Inc. satisfies standard rules with 45% spent on solar research. AeroWind Ltd. fails rural exception criteria because its

180,000 budget exceeds the

150,000 maximum limit. BioTerra Co. qualifies via the rural exception and receives 50% of

120,000, totaling

60,000.

Step-by-Step Solution

Evaluate Statement 1: Helios Inc. qualification under Tab 1 standard rules.

Helios Inc. allocates

\frac{\$90,000}{\$200,000} = 45\%

of its budget to solar energy research, which exceeds the required

40\%

threshold. Therefore, Statement 1 is True.

Standard policy requires at least 40% allocation to solar or wind research.

Evaluate Statement 2: AeroWind Ltd. qualification under Tab 1 rural exception.

AeroWind Ltd. is in a rural zone, but its operating budget of

\$180,000

exceeds the maximum allowed budget limit of

\$150,000

for the rural exception. Furthermore, its wind research allocation is only

\frac{\$30,000}{\$180,000} \approx 16.7\%

, failing standard rules. Thus, Statement 2 is False.

The rural zone exception applies only if the total annual budget does not exceed $150,000.

Evaluate Statement 3: BioTerra Co. grant funding calculation using Tabs 1, 2, and 3.

BioTerra Co. is in a rural zone with a

\$120,000

budget (

\le \$150,000

), so it qualifies under the rural exception. According to Tab 3, funding is

50\%

of total budget:

0.50 \times \$120,000 = \$60,000

, which is below the

\$100,000

cap. Therefore, Statement 3 is True.

Qualifying startups receive 50% of their operating budget capped at $100,000.

Key Concept

Multi-Source Reasoning Dichotomous Choice Evaluation

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