Federal law

[akhp77]

Source: MGMAT CAT

Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes. Thus, many American companies themselves purchase private aircraft. The vast majority of the business aviation fleet is owned by small and mid-size businesses, and flights are strictly for business purposes, with mostly mid-level employees on board. These companies and their boards of directors are in full compliance with the law and with what is best for their businesses.

Which of the following can be most properly inferred from the statements above?

A: The Federal law in question costs businesses money.
B: Most executives would rather fly on company owned planes than on commercial airlines.
C: Large businesses usually have their executives fly first or business class on commercial flights.
D: Upper level executives are less often in compliance with the law.
E: By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.

OA: E

I stuck over B and E, and I finally selected B, which is wrong.

My questions:-
1. Can you please explain intended meaning of "Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes"?
2. B is wrong because "commercial airlines" is not at all discussed. Am I right?
3. D option => "By not receiving any reimbursement for these flights" is based on 1st sentence of the passage.

I understood that D is correct. However, if you can clear my above doubt, it would be better for future.

[phoenix.rkchr]

My understanding of this passage is:

There is some law which restricts companies to pay their executives the expanses occurred in travelling using hired private flights for any business related trip.

The use of the private flights by company’s executives is important to commute fast on business related trips.

Companies come up with the idea to maintain their own private flights so that their executive can travel using these flights so that their executives need not to require to reimbursement the expances and this way both companies and executives will also be comply with the law.

Now think of a choice which serve this purpose.

E: By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.

Now executives are using company owned flights so now they need not to reimbursement for these flights. This way they are complying with the law.

Hope this will help. :)

[tim]

Thanks phoenix. You should also note that this question is addressed elsewhere on the forum..