Logical Reasoning

PT120 · S1 · Q11 In contemplating major purchases, businesses

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In contemplating major purchases, businesses often consider only whether there is enough money left from monthly revenues after paying monthly expenses to cover the cost of the purchase.

Conclusion (so)

The use of a cash flow statement is critical for all businesses.

Evidence

Businesses can get into trouble by over-expanding if they only account for monthly expenses, ignoring non-monthly expenses.

Evaluate

"Cash flow statement" is a New Concept in the Conclusion, so we can ask ourselves,

Since they're telling us that it's critical for businesses to account for non-monthly expenses, they must be assuming that cash flow statements solve the problem of tracking both monthly and non-monthly expenses.

Goal

Identify an answer that effectively demonstrates how cash flow statements are indispensable for tracking non-monthly expenses or proves there are no viable alternatives, reinforcing their critical role.

11.

Which one of the following, if true, most strengthens the argument?

  1. Only a cash-flow statement can

    Weaker Impact

    This does make cash-flow statements sound uniquely good at something, but the argument was stressing the need to document non-monthly expenses, and this answer doesn't tell us that a cash flow statement can do that.

    3% picked this

  2. Any business that has overexpanded

    Weaker Impact

    This states that cash flow statements benefit some businesses, which does little to enhance the claim that they're critical for all businesses.

    4% picked this

  3. When a business documents only

    No Impact

    This doesn't tell us anything about cash flow statements, so it does nothing to support the idea that they're critical for all businesses.

    1% picked this

  4. Correct

    A cash-flow statement is the

    Why this is right

    This states that cash flow statements are the only way to track both monthly and non-monthly expenses, arguing for their necessity in preventing over-expansion and supporting their critical role for all businesses.

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

    78% picked this

  5. When a business takes into

    No Impact

    This doesn't tell us anything about cash flow statements, so it does nothing to support the idea that they're critical for all businesses.

    14% picked this

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