Logical reasoning PrepTest 120 · Section 1 · Question 11

Incorrect. The noted problem is in looking at only monthly expenses, so being the only thing that can look at those expenses doesn't solve the problem.

Incorrect. This answer doesn't address whether a cash-flow statement would help to prevent overexpansion in the first place, which is the problem that the argument in the stimulus purports to solve.

Incorrect. This answer doesn't tie into a cash-flow statement at all, so it can't strengthen this argument.

Correct. Argument or Facts:
Argument

Valid or Flawed:
Flawed

Question Type:
Strengthen

Stimulus Summary:
Problem - A business that looks only at monthly expenses might overexpand
Solution - Use a cash-flow statement!

Answer Anticipation:
The argument brings up a problem and concludes a solution to that problem. When that happens, it's important to see if the solution noted is actually established as addressing the problem.

Here, without getting into the details, we should quickly conclude that it doesn't. The solution—using a cash-flow statement—isn't mentioned at all in the premises. Since we don't know anything about a cash-flow statement, we can't tell if it addresses the noted problem.

So to strengthen this argument, we should find an answer that establishes something about a cash-flow statement that will address the problem. That problem is that a company considering only monthly expenses when looking to expand might overexpand. Thus, for a cash-flow statement to help with this problem, it would need to look at expenses that aren't monthly.

Answer Explanation:
This answer establishes not only that a cash-flow statement tracks non-monthly expenses, but that it's the only thing to do so. That supports the conclusion not just that a cash-flow statement would address the noted problem, but that it's "critical" since nothing else can track those expenses.

Key Takeaway:
When a new concept shows up in the conclusion of a Strengthen question (any type of Strengthen question), the correct answer will almost always bring that concept up and connect it to something from the premises.

Incorrect. The argument has already established that this is true in considering whether to expand. The conclusion didn't have an issue in that it generalized from that decision to all decisions (an assumption this answer would strengthen), so this answer is incorrect. A faster way to eliminate this answer? It doesn't mention cash-flow statements!