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24 Jun 2015, 12:08
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C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
45%
(medium)
Question Stats:
73% (02:18) correct
27%
(02:38)
wrong
based on 2962
sessions
History
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Not Attempted Yet
A survey of entrepreneurs who started companies last year shows that while virtually all did substantial preparatory research and planning, only half used that work to produce a formal business plan. Since, on average, the entrepreneurs without formal plans secured the capital they needed in half the time of those with plans, these survey results indicate that, in general, formal plans did not help the entrepreneurs who produced them to secure the capital they needed.
Which of the following, if true, most seriously weakens the argument?
(A) Companies started by entrepreneurs who had used formal business plans to attract investment were on the whole as profitable in their first year as were companies started by entrepreneurs who had not produced such plans.
(B) In surveys of entrepreneurs who have attempted without success to raise sufficient capital, more than half of the respondents indicate that they have produced a formal business plan.
(C) Among the entrepreneurs surveyed, those who did not produce formal business plans sought and received a much larger proportion of their capital from investors with whom they had a long-standing business relationship.
(D) The entrepreneurs surveyed who did not produce a formal business plan spent nearly as much time doing preparatory research and planning as the entrepreneurs who produced plans.
(E) The entrepreneurs who produced business plans generally reported later that the process of writing the plan had increased their confidence that their company would succeed.
Which of the following, if true, most seriously weakens the argument?
(A) Companies started by entrepreneurs who had used formal business plans to attract investment were on the whole as profitable in their first year as were companies started by entrepreneurs who had not produced such plans.
(B) In surveys of entrepreneurs who have attempted without success to raise sufficient capital, more than half of the respondents indicate that they have produced a formal business plan.
(C) Among the entrepreneurs surveyed, those who did not produce formal business plans sought and received a much larger proportion of their capital from investors with whom they had a long-standing business relationship.
(D) The entrepreneurs surveyed who did not produce a formal business plan spent nearly as much time doing preparatory research and planning as the entrepreneurs who produced plans.
(E) The entrepreneurs who produced business plans generally reported later that the process of writing the plan had increased their confidence that their company would succeed.
24 Jun 2015, 14:22
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You could arrive at the right answer through elimination. The conclusion is only about whether business plans help to secure funding. So the answers which discuss how long it takes to do research, or about how profitable businesses are in the long run, are irrelevant. That rules out A, D and E, and answer B does the opposite of what we want (it also suggests that businesses with plans have less success securing funding) so C must be right.
But you can also see why C is right. The question suggests that businesses with no plan have an easier time securing funding. It's a kind of cause-effect argument. But it's possible the argument has cause and effect reversed - maybe it's the businesses that already know they can get funding easily who do not produce business plans. That's what answer C says.
But you can also see why C is right. The question suggests that businesses with no plan have an easier time securing funding. It's a kind of cause-effect argument. But it's possible the argument has cause and effect reversed - maybe it's the businesses that already know they can get funding easily who do not produce business plans. That's what answer C says.
24 Jun 2015, 17:53
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A survey of entrepreneurs who started companies last year shows that while virtually all did substantial preparatory research and planning, only half used that work to produce a formal business plan. Since, on average, the entrepreneurs without formal plans secured the capital they needed in half the time of those with plans, these survey results indicate that, in general, formal plans did not help the entrepreneurs who produced them to secure the capital they needed.
Which of the following, if true, most seriously weakens the argument?
A - Companies started by entrepreneurs who had used formal business plans to attract investment were on the whole as profitable in their first year as were companies started by entrepreneurs who had not produced such plans.
Out of context as we are talking of securing the capital and not profitability. Even if it were within the context, it may just be strengthening rather than weakening the arguement as the profitability in both cases is comparable
B - In surveys of entrepreneurs who have attempted without success to raise sufficient capital, more than half of the respondents indicate that they have produced a formal business plan.
It rather strengthens the argument , in which it says that there is an equal chance of failing even after making formal plan.
C - Among the entrepreneurs surveyed, those who did not produce formal business plans sought and received a much larger proportion of their capital from investors with whom they had a long-standing business relationship.
CORRECT... this proves that entrepreneurs who have been able to raise funds without plan were able to make up the capital due to their relationship with investors..
D - The entrepreneurs surveyed who did not produce a formal business plan spent nearly as much time doing preparatory research and planning as the entrepreneurs who produced plans.
Out of context .. we are not talking of time
E - The entrepreneurs who produced business plans generally reported later that the process of writing the plan had increased their confidence that their company would succeed.
Again out of context
Which of the following, if true, most seriously weakens the argument?
A - Companies started by entrepreneurs who had used formal business plans to attract investment were on the whole as profitable in their first year as were companies started by entrepreneurs who had not produced such plans.
Out of context as we are talking of securing the capital and not profitability. Even if it were within the context, it may just be strengthening rather than weakening the arguement as the profitability in both cases is comparable
B - In surveys of entrepreneurs who have attempted without success to raise sufficient capital, more than half of the respondents indicate that they have produced a formal business plan.
It rather strengthens the argument , in which it says that there is an equal chance of failing even after making formal plan.
C - Among the entrepreneurs surveyed, those who did not produce formal business plans sought and received a much larger proportion of their capital from investors with whom they had a long-standing business relationship.
CORRECT... this proves that entrepreneurs who have been able to raise funds without plan were able to make up the capital due to their relationship with investors..
D - The entrepreneurs surveyed who did not produce a formal business plan spent nearly as much time doing preparatory research and planning as the entrepreneurs who produced plans.
Out of context .. we are not talking of time
E - The entrepreneurs who produced business plans generally reported later that the process of writing the plan had increased their confidence that their company would succeed.
Again out of context
