A company with long-outstanding

Answer choices

1. A

   Correct74% picked this

   a company that pursues its debtors on its own typically collects more than 15 percent of the total amount of the long-outstanding

   Why this is right

   This affirms why the author thinks these businesses should choose to pursue debt collection themselves, rather than sell off the rights for 15% of the value of the debt. He must think that the alternative plan performs better than 15% of the value of the debt. If we negated this, it would surely weaken the author's recommendation: when you pursue debt on your own, you usually get less than 15% of the value On Necessary Assumption, if negating an answer gives you an idea that hurts the argument, that should be your correct answer.

   Skill tested: Necessary Assumption · how this choice captures the argument's function is the move to repeat next time.

   74%
2. B

   Too Strong22% picked this

   the cost to a company of pursuing its debtors on its own for payment of long-outstanding bills does not exceed 15 percent of

   Too Strong: doesn't exceed 15% Too Specific: the costs This is tricky and tempting. If we negate it, does it hurt the argument? the money this company would spend trying to collect debt on its own would be more than 15% the value of the debt. At first, I think it does feel like it hurts the argument. If we were the company who took this author's advice, we'd be like If I had gone with the collection agency, I would have been up $15k right now! Instead, you convinced me to pursue this $100k on my own and we're more than $15k down right now because of the cost of pursuing this debt. But, it doesn't hurt the argument. The author is assuming that if a company pursues the $100k debt on its own, it will get more money than if they were to just get $15k from a collection agency. Suppose that a company spends $20k chasing its $100k of debt (that exceeds 15 percent). If they were successful at recovering 80% of the $100k in debt, they would have brought in $80k. They spent $20k to chase down $80k of revenue. That's a $60k net gain. That's a better outcome than if the company had just accepted the $15k from the collection agency.

   22%
3. C

   Opposite1% picked this

   collection agencies that are assigned bills for collection by companies are unsuccessful in collecting, on average, only 15 percent of the

   The author isn't really assuming anything specifically about the financial outcome for the collection agency, but since the author is suggesting that our company pursue debt on our own rather than "settle" for 15%, he's implicitly thinking, "Whoa, Broseph .... you're gonna take $15k from the collection agency and they're gonna turn that around and pull $50k out of the debtors? You should just do it yourself and get the $50k on your own." So if anything the author is assuming the collection agencies expect to do better than 15%.

   1%
4. D

   Out of Scope: 15% of customers2% picked this

   at least 15 percent of the customers that owe money to companies eventually pay their bills whether or not those bills are

   We're definitely curious what the average rate of return is on this outstanding debt. Unfortunately, being told that 15% of customers pay their money back doesn't tell us whether that's more or less than 15% of the total value of the debt. It's possible that the 15% of customers who do pay off their bills are the ones with the smallest bills. In that case, they wouldn't bring in 15% of the revenue. The % of customers who pay back their bills is out of scope because it's not a reliable metric for what we really care about: if you pursued the debt on your own, would your net revenue be more than 15% of the total value of the debt?

   2%
5. E

   Out of Scope1% picked this

   unless most of the customers of a company pay their bills, that company in the long run

   Out of Scope: profitable Too Strong: unless / most Did the author's logic make this Premise to Conclusion move? most customers (51%) ? company won't do not pay bills be profitable Heavens, no. The move in the argument was, collection agency pursue debt only pays 15% of ? on your own total value instead

   1%