#11 - In contemplating major purchases, businesses often

[Administrator]

Complete Question Explanation

Strengthen. The correct answer choice is (D)

In this stimulus, the author provides a single premise: since many expenses don’t occur monthly, accounting based on monthly expenses can cause a business to overexpand. From this premise the author draws the conclusion that use of a cash-flow statement is critical for all businesses.

Answer choice (D): This is the correct answer choice. Since it has not been made explicit, we should probably look for the answer choice which links the use of a cash-flow statement with protection against the author’s concerns about monthly expenses. Answer choice (D) does exactly that: if a cash-flow statement is the only way to track both types of expenses, then the author is justified in concluding that the use of cash-flow statements is critical.

Answer choice (A) fails to strengthen the argument because the expenses which concern the author are the non-monthly expenses. Answer choice (B) fails to create the needed link, and the author’s discussion is about avoiding overexpansion, not responding to it. Answer choice (C) fails to even mention cash-flow, so there is no way that this answer choice could provide the link that we are seeking. The same can be said for answer choice (E); we know that we need the answer choice which somehow points out the necessity of a cash-flow statement, so we should be fairly confident when ruling out both answer choices (C) and (E).

[Marce]

Answer choice A refers to ALL monthly expenses, is that why it is incorrect?

[Jonathan Evans]

Good question, Marce!

This stimulus is a great example of conditional reasoning that is not presented in a straightforward "if...then" form. In our stimulus, let's first focus on the conclusion. The claim is that cash-flow statements are critical for any business. Does that sound like something necessary or sufficient? It seems as though the author thinks cash-flow statements are required or essential to succeed. So let's rephrase this conclusion in a way that is more straightforward for ourselves: if a business is to succeed, it must use a cash-flow statement.

Now we have to take a step back. Why must they use a cash-flow statement? What does this cash-flow statement seem to help us do? According to the stimulus, the cash-flow statement must be the way, in fact the only way, that a business can track expenditures from month to month (which we must track to ensure that over-expansion cannot occur).

Here we have a pretty clear shift from the information in the premises to idea underpinning the claim: we must connect a cash-flow statement to the concept of tracking expenditures from month to month.

Answer choice (A) is wrong principally because it does not make this connection, but let's take a closer look: we're not concerned here with expenses within a month. Instead, we're concerned with expenses from month to month. Thus the issue here is not the fact that (A) refers to "ALL" monthly expenses but instead that it fails to make the connection with expenses that occur across multiple months.

Notice now in choice (D) that we now at least address expenses that occur across months. As a first step, connecting such expenses to a cash-flow statement is crucial.

Here actually, if you were to identify the connection you need to make, between month-to-month expenditures and cash-flow statements, you could knock out the rest of the answer choices without doing any additional work. Put differently, even if you didn't dig into the precise conditional relationship here, you could still get the question right.

What's your takeaway? Try to identify and isolate the gap or missing link between the information in the premises and the reasoning in the conclusion. As a first step, this process will often be sufficient to get the problems right.

I hope this helps.

[hkassaaa]

I am still unclear as to why E is wrong. When I did it, I was able to narrow it down to D & E which i feel are fairly similar answers. Why is D the better answer?

[atierney]

Hi,

For this question, E is probably a true inference, i.e. one that follows from the premises. However, for this question, the task at hand is to strengthen the argument as a whole; and to do, you really want to pay attention to its conclusion, to understand precisely what it is you are to be strengthening. Here, the conclusion is that the use of cash-flow statements is critical for all businesses, and we want to choose the answer choice that best bolsters this particular claim (the conclusion of the stimulus). Another interesting feature about this particular strengthen question is that it takes the form of an assumption question in that there is the new piece of information, use of cash-flow statements, in the conclusion. Of course, this only underscores the importance of paying attention to the conclusion itself! Because answer choice E doesn't mention cash-flow statements, it doesn't actually strengthen the argument, where the argument hinges primarily on this idea.

Let me know if you have any further questions.