revenue shortfall : GMAT Verbal Section
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# revenue shortfall

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Manager
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09 Aug 2005, 05:04
Commissioner: Budget forecasters project revenue shortfall of a few billion dollars in coming fiscal yr. Since there is no feasible way to increase available funds, our only choice is to decrease expenditures. The plan before you outlines feasible cuts that would yield savings of a billion dollars over coming fiscal yr. We will be able to solve problem, therefore, only if we adopt the plan.

Reasoning in argument is flawed because it:
(a) relies on information that is far from certain
(b) confuses being an adequate solution with being a required solution
(c) inappropriately relies on opinion of experts
(d) inappropriately employs language that is vague
(e) takes for granted that there is no wat to increase available funds
If you have any questions
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Manager
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09 Aug 2005, 06:08
tricky one; i will go with B
Director
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09 Aug 2005, 07:56
I will go with D on this

(a) relies on information that is far from certain
- althought it is ture that everything is still in air. Revenue shortfalls, plan etc. But I dont think the reasoning is flawed beased on this choice.
(b) confuses being an adequate solution with being a required solution
- I dont know what is adequate or required solution....
(c) inappropriately relies on opinion of experts
- This one is out...
(d) inappropriately employs language that is vague
- This one makes a little sense, since the argument is not talking about savings, the argument is talking about cutting down expenses.
(e) takes for granted that there is no way to increase available funds
- this one is out too.
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09 Aug 2005, 15:49
IMO clearly B, the argument talks about scarcity of few billion and produces a plan to save a billion.

Riteshgupta,
D is not correct because money saved is money earned.
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09 Aug 2005, 17:02
ranga41 wrote:
IMO clearly B, the argument talks about scarcity of few billion and produces a plan to save a billion.

good point but i donot think there is confusion.
A is likely because the whole passage is about the future, which is not certain.
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09 Aug 2005, 17:24
I also got B with Ranga's reasoning.

I don't think A is correct here. We are talking about projection which is about future. Projection is a nice way to guage your needs.
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10 Aug 2005, 09:16
I think it is A as the events predicted by a forecast is
not certain to happen
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10 Aug 2005, 20:53
Any OA?
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11 Aug 2005, 09:51
it can't be (A) because we cannot determine if the info. was indeed certain or not. it's actually not our concern to discern the validity of the info.

it's certainly (B) - agree with ranga.
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11 Aug 2005, 10:52
A future event cannot be said to happen certainly.
Forecasting is nothing but trying to predict a
future event the happening of which is therefore
not certain.

The author makes some assertions based on the
forecast which is not a sound argument.
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11 Aug 2005, 11:54
sravna wrote:
A future event cannot be said to happen certainly.
Forecasting is nothing but trying to predict a
future event the happening of which is therefore
not certain.

The author makes some assertions based on the
forecast which is not a sound argument.

Yes Sravna, you are right. i don't know what i was thinking then...
however, is reliance on a forecast a flaw?
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11 Aug 2005, 15:35
Arsene,

It seems to me that the commissioner's argument proceeds as though the forecast scenario is the only possible one. He says "... the only way to solve the problem..." as if other possibilities are closed. I think he is relying a little too much on the forecast.
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11 Aug 2005, 16:17
the answer is B. this is only one of a few possible solutions , maybe they can acquire more funds instead of increasing available funds or cutting costs -> therefore this is only of many feasible solutions its not a required solution , hence answer B. OA please?
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12 Aug 2005, 06:16
The fact that there is only one solution is quite possible as he points out that there is no other feasible way out which is perhaps right. So it seems to me that B is ruled out.
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12 Aug 2005, 06:29
I wud choose B. IMO A is out as it states a extreme condition. Any plan or forecast at this point of time has to be uncertain because it isn't implemented. B instead points out that the comm is insisting that HIS plan is the ONLY solution available. You can have diff plans to cut costs. His plan of cutting costs can only be one of the adequate solutions not the only solution. A gud qn becos it misleads us to believe that "cutting costs" is the required solution. Nope, its the comm's plan that is not the only available soln.

GA
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12 Aug 2005, 07:10
We are talking of two things here to solve the potential problem of revenue shortfall- one is increasing the revenue , other is decreasing the expenditure. In both the cases the commissioner indicates that *all that are feasible* have been explored. So, I don't think that there is any confusion between being an adequate solution with being a required solution.
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12 Aug 2005, 08:32
I will go with B.

As Ranga has reasoned out earlier, there is a projection of a shortfall of a few billion dollars, and the commissioner states that cutting expenses to the tune of a billion dollars will be sufficient. In the commissioner's own words "We will be able to solve problem, therefore, only if we adopt the plan."

Well!! the truth is that the problem won't be solved even if the plan were to be adopted, however the cost cutting measure may be adequate for now. Thus B.

sravna, I can understand your insistence on A. But, a projection is an approximation based on reliable figures. While, the projection maybe on shaky grounds, the commissioner's insistence that the cost cutting measure is the ONLY way to solve the problem is a major flaw.

Ritesh, There is no ambiguity in the commissioner's statement.
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12 Aug 2005, 10:27
Good point Darth. But still I am not able to accept it wholeheartedly because the "Only" used by the commissioner covers all the possibilities.

Consider a similar reasoning:

In a race between a hare and a tortoise, the tortoise lags behind. Now we can say the only ways the tortoise can catch up with the hare is for the tortoise to increase its speed which we reject as not being feasible or the hare to slow down. Now in this option I have explored all the feasible ways to slow down the hare just as the commissioner did in evaluating the feasible cuts and now I proclaim that the only way we could make the tortoise catch up with the hare will be according to the practical techniques I have come up with or in other words according to my plan.

Any flaw in reasoning?
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12 Aug 2005, 16:10
one last attempt at reasoning my answer. The commissioner mentions that the budget forecasters estimate a shortfall of *a few billion* dollars ( I consider this as crucial) The commisioner also proposes a cut of *1 billion* dollars and claims that as a solution . So it is reasonable to assume that he expects the estimated shortfall to be in that vicinity. For the case of illustration lets consider it as 4 billion dollars. Now the tenability of the commissioner's argument is sensitive to how accurate this data is. For example if it is away by -4 billion then there is *no problem that needs a solution* and if it is away by +4 billion, then the commissioners proposal may not be even adequate.

Thus we can see that the flaw in his argument is in assuming that the estimated shortfall will more or less accurately be the reality.
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12 Aug 2005, 18:15
good reasoning i am still going with my original answer B
12 Aug 2005, 18:15

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# revenue shortfall

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