Bunuel wrote:
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. But many expenses do not occur monthly; taking into account only monthly expenses can cause a business to overexpand. So the use of a cash-flow statement is critical for all businesses.
Which one of the following, if true, most strengthens the argument?
(A) Only a cash-flow statement can accurately document all monthly expenses.
(B) Any business that has overexpanded can benefit from the use of a cash-flow statement.
(C) When a business documents only monthly expenses it also documents only monthly revenue.
(D) A cash-flow statement is the only way to track both monthly expenses and expenses that are not monthly.
(E) When a business takes into account all expenses, not just monthly ones, it can make better decisions.
EXPLANATION FROM Fox LSAT
Ideally, when you arrived at the end of this argument you said to yourself, “Cash flow statement? What the **** is a cash flow statement? Where did that come from?!” If you are able to recognize that the term “cash flow statement” appeared nowhere else in the argument besides the conclusion, you are definitely on the right track. That’s just not a legitimate argumentative strategy on the LSAT. The concepts
must connect together. If you’re going to tell me I need to have a cash flow statement, you better well provide some Goddamn evidence about why cash flow statements are necessary.
Here, the evidence was only about the importance of considering longer-term expenses instead of monthly expenses. Well, let’s take Fox LSAT as an easy example. I do take into account long-term expenses (I’m not an idiot) but there is no way in hell I am going to waste my time generating a cash-flow statement every month. There are other ways to plan. Personally, I just make sure to keep some money aside for irregular/unplanned expenses. There’s no “cash flow statement” involved in keeping a little cash in reserve.
We’re asked to strengthen the argument, so I’d love an answer that protects against my objection by connecting the facts to the conclusion. Something like, “The cash flow statement is the best/only/easiest way to plan for irregular/unplanned expenses” would be a very nice answer.
A) Close, but the problem stipulated in the facts isn’t monthly expenses. The problem is
irregular expenses. We’re not worried about monthly expenses, because it’s acknowledged in the argument that many companies just pay all their monthly expenses first, then spend whatever’s left. It’s the longer-term and irregular expenses that are the issue.
B) No, the point was, “Use a cash flow statement so that you
don’t overexpand.” This answer only addresses what’s happened when you’ve already overextended yourself.
C) This does not have the magic words “cash flow statement.” There is no way in hell the correct answer doesn’t include those words.
D) Aha! This matches our prediction. If this is true, then a cash flow statement is the only way (i.e., it’s necessary, i.e., it’s “critical”) for tracking non-monthly expenses. (And monthly expenses as well, although that’s irrelevant.) This answer does more than we need it to, but that’s just fine if we’re trying to strengthen the argument.
E) Again, this lacks the magic words “cash flow statement.”
Our answer is D, because it’s the only one that plugs up the giant hole in the logic.
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