PT102.S3.Q13

PrepTest 102 - Section 3 - Question 13

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A company with long-outstanding bills owed by its customers can assign those bills to a collection agency that pays the company a fraction of their amount and then tries to collect payment from the customers. █████ █████ ████████ ███ █████████ ████ ██ ███████ ██ ███ █████ ██████ ██ ███ ███████████ ██████ █ ███████ ██████████ ██ ████████ ██████ ████ ████████████████ █████ █████ ██ ████ ███████ ██ ██████ ███ ███████ ██ ███ ████

Summary

The argument concludes that companies with long-outstanding debts would better reduce their losses by going after their debtors than by selling the debts to collection agencies. In support, the argument claims that collection agencies only pay 15 percent of the amount debtors owe.

Notable Assumptions

The argument assumes that the companies in question would recover more than 15 percent of the outstanding debts if they went after the debtors themselves. It also assumes that it wouldn’t cost companies so much to recover the debts that they would net less than 15 percent of the amount owing.

Without these assumptions, there’s no way that companies could reduce their losses by collecting debts themselves compared to selling the debts.

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13.

The argument depends on the ██████████ ████

a

a company that ███████ ███ ███████ ██ ███ ███ █████████ ████████ ████ ████ ██ ███████ ██ ███ █████ ██████ ██ ███ ████████████████ █████ ████ ██ ██ ████

b

the cost to █ ███████ ██ ████████ ███ ███████ ██ ███ ███ ███ ███████ ██ ████████████████ █████ ████ ███ ██████ ██ ███████ ██ ███ █████ ██████ ██ █████ █████

c

collection agencies that ███ ████████ █████ ███ ██████████ ██ █████████ ███ ████████████ ██ ███████████ ██ ████████ ████ ██ ███████ ██ ███ █████ ██████ ██ █████ █████

d

at least 15 ███████ ██ ███ █████████ ████ ███ █████ ██ █████████ ██████████ ███ █████ █████ ███████ ██ ███ █████ █████ ███ ████████ ██ █ ██████████ ██████

e

unless most of ███ █████████ ██ █ ███████ ███ █████ ██████ ████ ███████ ██ ███ ████ ███ ████ ███ ██ ██████████

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