PT147.S4.Q2 > Question

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 Question 6 Question 7

PASSAGE 2

Question 8 Question 9 Question 10 Question 11 Question 12 Question 13 Question 14

PASSAGE 3

Question 15 Question 16 Question 17 Question 18 Question 19 Question 20 Question 21 Question 22

PASSAGE 4

Question 23 Question 24 Question 25 Question 26 Question 27

SECTION 3 · rc

PASSAGE 1

Question 1 Question 2 Question 3 Question 4 Question 5 Question 6

PASSAGE 2

Question 7 Question 8 Question 9 Question 10 Question 11 Question 12 Question 13

PASSAGE 3

Question 14 Question 15 Question 16 Question 17 Question 18 Question 19 Question 20 Question 21

PASSAGE 4

Question 22 Question 23 Question 24 Question 25 Question 26 Question 27

SECTION 4 · lr

Acme will go bankrupt. Why? Because they will go bankrupt if their earnings falls below a certain level, and they have incorrectly reported their earnings.

The author has set up a conditional chain, beginning with “if Acme’s earnings fall below $1 million per year,” and ending in bankruptcy. However, we only know that Acme has falsely reported their earnings—we don’t know that their earning’s have fallen below the threshold that will trigger bankruptcy. The argument has assumed this.

This matches our prediction, and it is necessary for the argument. If (A) is negated, then there’s no reason to believe Acme will declare bankruptcy.

It’s irrelevant whether Acme has other debts. We are only discussing this particular loan, and how Acme’s earnings might affect that loan.

It doesn’t matter whether this is a repeat offense. It only takes one instance of less than $1 million in earnings to trigger the conditional chain that leads to bankruptcy.

Also, like we said in our analysis, we cannot assume that “overstated earnings” = less than $1 million.

The author’s support is about Acme overstating their earnings in a previous year, and how that will lead to bankruptcy. The current year is irrelevant.

This would be sufficient for Acme to declare bankruptcy, but it is not necessary.

We aren’t concerned with what could happen if Acme does not have to repay the loan, or how they might avoid bankruptcy. The conclusion is that Acme will go bankrupt.

PrepTest 147 - Section 4 - Question 2

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