Logical reasoning PrepTest 147 · Section 4 · Question 2

Correct. Argument or Facts:
Argument

Valid or Flawed:
Flawed

Question Type:
Strengthen with Necessary Premise

Stimulus Summary:
Earnings fall below $1m/year → Bank loan immediately repaid in full
Bank loan immediately repaid in full → Declare bankruptcy
Acme stated it earned more than $1m last year, but that was overstated
Therefore: Acme will have to declare bankruptcy

Answer Anticipation:
While conditional logic isn't common in Strengthen with Necessary Premise questions, it's not unheard of, either. When it is present, there aren't usually illegal negations or illegal reversals. Instead, the flaw is usually a jump between terms, or a failure to establish the sufficient condition is present when applying it to a specific situation.

Here, we can see that the conclusion is supportable by the conditional premises without needing to take a contrapositive, so let's make the chain so it's easier to work with:

Earnings fall below $1m/yr → Loan must be paid in full → Bankruptcy

While the stimulus notes that Acme overstated its earnings when it said they were over $1m last year, it doesn't say by how much it was overstated. In order for the conditional to apply and the conclusion that Acme will have to declare bankruptcy to be guaranteed, it needs to be established that the earnings fell below $1m last year. Let's find an answer establishing that.

Answer Explanation:
This answer establishes that the sufficient condition for having the loan called and thus needing to declare bankruptcy is met. If this isn't true, then there's no reason to believe Acme will need to declare bankruptcy, so this is the correct answer.

Key Takeaway:
When Strengthen with Sufficient/Necessary Premise questions have conditional logic, you shouldn't expect to see illegal reversals or negations, since to "fix" those flaws the answer would need to bring up the reverse/negated statement. Instead, expect to see term shifts/gaps in conditional chains, or a failure to establish a scenario triggers the sufficient condition of the conditional.

Incorrect. The bank loan could drive Acme into bankruptcy if it's called, so there's no need for there to be other debts.

Incorrect. The loan gets called if Acme falls under $1m for a year, so there don't need to be multiple years of Acme under $1m. Also, this answer is about Acme overstating earnings, not actually being under $1m, so it's another step removed from being necessary.

Incorrect. The argument uses the overstatement of the earnings from last year to justify the conclusion that they'll need to declare bankruptcy, so what happens this year might be sufficient to make them declare bankruptcy, but it's not necessary for this argument to work.

Incorrect. What would happen in a hypothetical world is almost never going to be necessary for a given argument to work.