Logical Reasoning

PT147 · S4 · Q2 Acme's bank loan must be

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Acme's bank loan must be immediately repaid in full if Acme's earnings fall below $1 million per year.

Conclusion (so)

ACME will have to declare bankruptcy.

Evidence

ACME has overstated its earnings for last year.

If its earnings fall below $1 million per year, then its loan must be immediately repaid.

And if its loan must be immediately repaid, then it will have to declare bankruptcy.

Evaluate

The argument is trying to prove that ACME will have to declare bankruptcy, and it provided two conditional premises that end with that idea:

earnings fall loan must have to below $1 mill → be immed → declare this year repaid bankrupty

All the author has to do is tell us that ACME's earnings fell below $1 million last year.

Did she ever say that?

No. She only said that they admitted to overstating their earnings from last year.

Goal

Let's look for the missing Trigger Fact: their earnings fell below $1 million

It's also possible they would present it as a Missing Link: if overstated last year's earnings, then earnings were below $1 million

2.

The argument requires the assumption that

  1. Correct

    Acme's earnings for last year,

    Why this is right

    This is the fact that triggers bankruptcy, so the author needs to assume it's true in order to assume they'll have to declare bankruptcy. If we negated this and said, "Their earnings last year were at least $1 million", then there'd be no reason to think they need to declare bankruptcy.

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

    92% picked this

  2. Acme has other debts besides

    Out of Scope (other debts)

    This argument is only about this bank loan, and this bank loan is enough to potentially trigger bankruptcy, so the author doesn't need to assume there are other debts.

    0% picked this

  3. last year is not the

    Too Strong (other overstated years)

    The author doesn't need them to have overstated other years. If they only overstated last year and last year was less than $1 million, then that would suffice to prove the conclusion about bankruptcy.

    1% picked this

  4. Acme's earnings for the current

    Irrelevant Quality

    This is tricky, because this answer would be a sufficient assumption. If their earnings were below $1 million this year, then that would trigger immediate loan repayment, which would trigger bankrupcty. But the author doesn't need their earnings to be below $1 million this year. If this year's earning were $1.5 million, but last year's earnings were below $1 million, last year's low earnings would still be enough to trigger immediate loan repayment and thus bankruptcy. So even though this would strengthen/prove, if true, it's not needed for the argument.

    5% picked this

  5. Acme would be able to

    Negation

    This is just an illegal negation of a premise. The author said: if they have to repay loan immediately, then bankrupt This is saying: if they don't have to repay loan , then bankrupt

    2% picked this

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