PT120.S1.Q11

SECTION 1 · lr

Question 1 Question 2 Question 3 Question 4 Question 5 Question 6 Question 7 Question 8 Question 9 Question 10 Question 11 Question 12 Question 13 Question 14 Question 15 Question 16 Question 17 Question 18 Question 19 Question 20 Question 21 Question 22 Question 23 Question 24 Question 25 Question 26

SECTION 2 · rc

PASSAGE 1
Question 1 Question 2 Question 3 Question 4 Question 5

PASSAGE 2
Question 6 Question 7 Question 8 Question 9 Question 10 Question 11

PASSAGE 3
Question 12 Question 13 Question 14 Question 15 Question 16 Question 17 Question 18

PASSAGE 4
Question 19 Question 20 Question 21 Question 22 Question 23 Question 24 Question 25 Question 26

SECTION 3 · lr

Question 1 Question 2 Question 3 Question 4 Question 5 Question 6 Question 7 Question 8 Question 9 Question 10 Question 11 Question 12 Question 13 Question 14 Question 15 Question 16 Question 17 Question 18 Question 19 Question 20 Question 21 Question 22 Question 23 Question 24 Question 25 Question 26

SECTION 4 · lr

Question 1 Question 2 Question 3 Question 4 Question 5 Question 6 Question 7 Question 8 Question 9 Question 10 Question 11 Question 12 Question 13 Question 14 Question 15 Question 16 Question 17 Question 18 Question 19 Question 20 Question 21 Question 22 Question 23 Question 24 Question 25 Question 26

PrepTest 120 - Section 1 - Question 11

Question

Explanation

Analytics

Show analysis

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. ███ ████ ████████ ██ ███ █████ ████████ ██████ ████ ███████ ████ ███████ ████████ ███ █████ █ ████████ ██ ███████████ ██ ███ ███ ██ █ █████████ █████████ ██ ████████ ███ ███ ███████████

Summarize Argument

The author concludes that all businesses need to use a cash-flow statement to protect their financial health. Why? Because the frequent practice of only taking into account monthly expenses when considering major purchases can cause businesses to overexpand. This is because there are also many non-monthly expenses that should be considered.

Notable Assumptions

In order for cash-flow statements to solve the problem of non-monthly expenses, the author assumes that cash-flow statements account for all expenses, including non-monthly expenses. The author also assumes that non-monthly expenses arise for all businesses.

Analysis by AlexandraNash

Show answer

11.

Which one of the following, ██ █████ ████ ███████████ ███ █████████

Only a cash-flow █████████ ███ ██████████ ████████ ███ ███████ █████████

This doesn't tell us whether cash-flow statements can help with non-monthly statements, so it doesn't strengthen the support structure in the argument.

Any business that ███ ████████████ ███ ███████ ████ ███ ███ ██ █ █████████ ██████████

The author is talking about all businesses, not just those that have already overexpanded. What about cash-flow statements makes them so useful? We still don't know, so this ins't helpful.

When a business █████████ ████ ███████ ████████ ██ ████ █████████ ████ ███████ ████████

This is just another downside to the monthly accounting model. It doesn't tell us anything about cash-flow statements, so it's irrelevant.

A cash-flow statement ██ ███ ████ ███ ██ █████ ████ ███████ ████████ ███ ████████ ████ ███ ███ ████████

A cash-flow statement is necessary to simultaneously track monthly and non-monthly expenses. This strengthens the conclusion, because businesses have no other way to account for all of these expenses.

When a business █████ ████ ███████ ███ █████████ ███ ████ ███████ █████ ██ ███ ████ ██████ ██████████

Do cash-flow statements allow businesses to do this? We don’t know. Also, making "better" decisions doesn't necessarily mean that this strategy is always "critical." So this isn't useful.

Difficulty

Question

89% of people who answer get this correct

This is a slightly challenging question.

CURVE

Score of students with a 50% chance of getting this right

25% 129

140

75% 150

Analysis

Question Stem Tags

Strengthen

Stems that ask us to provide an additional piece of information that, if true, would strengthen the argument in the stimulus.

Stimulus Tags

Link assumption

Arguments that feature an unjustified shift from one concept to another, which don't fit neatly into other common flaw categories (e.g. moving from premises about "houses" to a conclusion about "dwellings").

Answer Popularity

Popularity Avg. score

156

151

153

89%

163

157

Question history

You don't have any history with this question.. yet!