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Assumption IR - Workers at Facsum Inc.

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Assumption IR - Workers at Facsum Inc. [#permalink] New post 08 Jul 2012, 01:41
Journalist: Workers at Facsum Inc. have threatened to strike if management does not meet their demands for an immediate 5% pay raise and a paid lunch break. Further, workers are insisting that the company rehire 12 employees who were laid off for complaining about substandard wages and working conditions. It is well-known that Facsum reported that negative profits in 3 of its previous 4 quarterly earnings reports. We believe a strike is inevitable.

Identify an assumption required by the journalist’s argument and a fact that, if true, would most strongly support the required assumption. Make only two selections, one in each column.

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ANSWER:
[Reveal] Spoiler:
ASSUMPTION: Facsum likely does not have sufficient cash flow or cash reserves to support increased expenses.
SUPPORTING FACT: The majority of the losses were due to a significant decline in profit margins.
Assumption IR - Workers at Facsum Inc.   [#permalink] 08 Jul 2012, 01:41
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