Q13 - A company with long outstanding bills

[Shiggins]

I narrowed it down to A & B, but chose B. I chose B but having trouble seeing it as a weaker option than A. Need some help Thank you.

[jiyoonsim]

Let's break down the stem first.

Premise:
- A comapny with long-term unpaid bills can hire a collection agency to handle these bills.
- The agency will pay a fraction of the total amount of these unpaid bills.
- The agency pay only 15% of the total amount of these unpaid bills to the company.

Conclusion:
The company would be better to handle these unpaid bills on their own (instead of hiring a collection agency).

==============

So why on their own, instead of hiring a collection agency? Because, the author believes, that the company can do better than 15% by handling these bills on their own - which is what A) is saying.

Try opposite of A). If, when handled by company, only 10% of the bills will be paid. If that's the case, then the company would better off to leave the job to the agency. This throws the stem's argument away.

Think about this. If you clean your room by yourself, it costs only $1 per hour. If you hire a cleaning service, it costs $100 per hour. You'll probably go for cleaning on your own. But what if hiring a cleaning service costs you nothing?

B) doesn't matter. Let's say the cost of company handling these bills on their own is 30% of the bills. What if the company can get 90% of the bills paid with that cost? It's still better than hiring an agency, who only pays 15% of the bills.

Hope it helps.

[Shiggins]

Thank you.

[schmid215]

Was able to get this one, but it sort of makes me nervous. I'm really not sure (A) is a necessary assumption. The negation: the company doing it itself collects 15% or less. That doesn't seem to destroy the conclusion. Seems that in order to K.O. the argument, it would have to be true that it will cost the company the same amount of money, or more money, to pursue it on it's own as it would to hire the company to do so, which is plausible, but not air-tight. Makes sense that it would cost the company less, in fact, opening up the possibility that a collection rate under 15% could still yield a higher return than outsourcing the job. Perhaps the conclusion cannot follow given the premises, given the negation of (A)? That seems better and I think correct, actually. The evidence is the amount recouped, and if the amount recouped is less, you can't say *on the basis of the amount recouped* that it is better to do it internally, even though it would def still be possible for internally to be better, given the possibility of lesser costs than outsourcing.

[sumukh09]

Was able to get this one, but it sort of makes me nervous. I'm really not sure (A) is a necessary assumption. The negation: the company doing it itself collects 15% or less. That doesn't seem to destroy the conclusion. Seems that in order to K.O. the argument, it would have to be true that it will cost the company the same amount of money, or more money, to pursue it on it's own as it would to hire the company to do so, which is plausible, but not air-tight. Makes sense that it would cost the company less, in fact, opening up the possibility that a collection rate under 15% could still yield a higher return than outsourcing the job. Perhaps the conclusion cannot follow given the premises, given the negation of (A)? That seems better and I think correct, actually. The evidence is the amount recouped, and if the amount recouped is less, you can't say *on the basis of the amount recouped* that it is better to do it internally, even though it would def still be possible for internally to be better, given the possibility of lesser costs than outsourcing.

If you negate A it does attack the conclusion. The conclusion is that it would be "well advised" to pursue debtors on its own. If they're going to pursue debtors on their own then they better be getting more than 15% otherwise there's no incentive to pursue on their own; they'd be fine to let the collection agencies give them 15%. Let's look at this a little more closely:

Conclusion: Company would be well advised to pursue debtors on their own because collection agencies only give them 15%

Assumption: companies can get at least 15%

A) negated = company typically collects 15% or less

This destroys the argument that they would be well advised to pursue debtors on their own. Why would they?

[schmid215]

Seems to me like it definitely does not destroy the conclusion, in light of the fact that the *cost* of doing it internally could be less than the cost of outsourcing, opening up the possibility that a collection rate under 15% from doing it internally could still yield a higher overall return, a higher "profit", than from outsourcing it. I believe the negation of (A) makes us unable to draw the conclusion given the premises, for the reasons I stated above, rather than destroying the conclusion wholesale. Either way, we agree it's a necessary assumption.

[schmid215]

Just re-read the question for the first time since taking the section, and it seems like I misread it the first time around, which corrupted my analysis. You're definitely right, on reconsideration, I think.

[aznriceboi17]

What exactly does (c), "collection agencies that are assigned bills for collection by companies are unsuccessful in collecting, on average, only 15 percent of the total amount of those bills", exactly mean?

Does it mean that they are unsuccessful, to the extent that on average they collect less than 15 percent of the total amount?

I'm a bit thrown off, because if you drop the "on average" phrase, then "unsuccessful in collecting only 15 percent of the total amount of those bills" seems like the target is exactly 15 percent, and that they could be "unsuccessful" by collecting 30 percent.

[WaltGrace1983]

I got this one wrong, choosing B over the correct answer A. I am going to outline my thought process and show why I was wrong and where I was right. First things first, this is a necessary assumption question.

Collection agencies only pay companies 15% of the bill's total amount
→
A company interested in reducing losses should pursue debtors on its own

There are three important things to consider in this argument:

(1) This argument is focused on "reducing losses," not gaining profits. While this doesn't seem like an important distinction to make, it definitely is because of the nature of LSAT answers. There be pretty much a guarantee that some trick answer will be talking about increasing profits (and I was proved to be right).
(2) This is talking about what the company should do, what they would be "well advised" to do. It is very possible that the correct answer could say something about what the company "should" do.
(3) The noticeable gap here is that there is something that the companies themselves could do better. The collection agencies pay 15%. The arguer concludes that, for reducing losses, the companies should collect on their own. But why? Well maybe the author is concluding that the companies could definitely do a better job! Maybe they can collect more money! Maybe they can get the money faster! There is something going on here and this will probably be what the right answer addresses.

Let's start with the "easier" eliminations (if you could call them that).

What exactly does (c), "collection agencies that are assigned bills for collection by companies are unsuccessful in collecting, on average, only 15 percent of the total amount of those bills", exactly mean?

(C) Let's break this down. (C) is saying that collection agencies usually collect 85% of the total amount of the bills. In other words, these agencies generally are only unsuccessful in collecting 15% - meaning that they are successful in collecting 85%. We assume this means that, eventually, 85% of the bill will be collected from these agencies. Yet is this necessary to assume? This is a highly highly detailed answer choice. Couldn't it be true that they are unsuccessful in collecting 16% of the bills? Sure! Either way, the argument doesn't hinge on it. Why? Because the argument is talking about comparing the agencies to the companies in terms of their success in collecting. "Who can do a better job?!" the argument asks, before concluding "the companies can." (C) is just simply irrelevant.

(D) The LSAT is trying to get you to word-match here. It wants you to see "15%" and then try to justify the correct answer. Yet let's see again what is going on here. This is talking about 15% of the customers, not 15% of the bills. The problem with (D)? We don't know anything about the percentage of customers that pay. What is perhaps more important in this answer choice? Well, it says that this all happens "whether or not those bills are assigned to a collection agency." In that case, this is just making a big generalization on what customers do. Who cares!? We are talking about comparing the companies to the collection agencies. This outwardly says, "Don't even compare them!" Eliminate.

(E) "Will not be profitable." I told ya! Once again though, we are not concerned about being profitable. We are concerned with reducing losses which, by the way, has the connotation that you are not profitable. However, let's break down this more! 50% or less of the customers pay their bills → ~Profitable. Like (D), this is talking about customers and what they do. However, we aren't as concerned with this as we are about what the companies and the collection agencies do. Eliminate.

Ok now onto the tricky ones...

(B) Why did I choose B? Here was my thought process:

Let's assume the negation. Let's assume that the cost of a company of pursuing its own debtors exceed 15% of the total amount of bills. In other words, let's say the bill is $100 but it costs the company $16 to send out an investigator. Well clearly, this hurts the argument because it costs them more money and we are focusing on reducing losses! The company should definitely give this task to the collection agency because that 15 bucks is more or less guaranteed and spending 16 bucks to claim 15 bucks is stupid! You loss $1! Duh! I am totally going to get a 180 on this thing!


Now what did I do wrong? I forgot about the collection itself. Sure, let's say the company had to pay $16 and we know that the collection agency couldn't get them any more than $15. Bad idea? No! What if the company collects 100% of the total bill?! It would be totally worthwhile! The negated answer choice of (B) could in fact thereby help the argument and a negated answer choice that could help is simply no good! The lesson learned: think about all the possibilities.

What happened with (A) then? I had a hard time elimination (A) and I never really did I just thought (B) was better. FYI, there is no "better" on NA questions - there is only necessary and not necessary.

(A) is assuming that the company collects more than 15%. Try negating that: "The company does not collect more than 15%." If this the case, why in the world would they not hire the collection agency? Let's even say that both the company and the agency collect 15% equal. If even that were the case, wouldn't you give the work to someone else?

I hope my own thought process helps someone else in their thought process. This was no doubt a tricky question. Yet with the proper mindset, we will all get 180s right?

[aznriceboi17]

Hi, WaltGrace1983, thanks for your response.

I agree that C isn't correct, however, I'm still curious as to what its intended meaning is.

To use a simpler example, suppose I took a test with 100 questions, and I told you:

I was unsuccessful in getting only 15 questions wrong.

What does that mean? If I got 86 questions right, 14 wrong, then wasn't I 'unsuccessful in getting only 15 questions wrong?' (I'm interpreting 'only' as 'exactly' here, which is the part I'm unsure of).

[maryadkins]

Hi everyone!

Good discussion happening here!

To affirm/add to your explanations of the answer choices here, yes, great explanation of (A) and (B):

So why on their own, instead of hiring a collection agency? Because, the author believes, that the company can do better than 15% by handling these bills on their own - which is what A) is saying.

Try opposite of A). If, when handled by company, only 10% of the bills will be paid. If that's the case, then the company would better off to leave the job to the agency. This throws the stem's argument away.

Think about this. If you clean your room by yourself, it costs only $1 per hour. If you hire a cleaning service, it costs $100 per hour. You'll probably go for cleaning on your own. But what if hiring a cleaning service costs you nothing?

B) doesn't matter. Let's say the cost of company handling these bills on their own is 30% of the bills. What if the company can get 90% of the bills paid with that cost? It's still better than hiring an agency, who only pays 15% of the bills.

As for (C), it tells us that collection agencies are unsuccessful at collecting only 15 percent of bills, on average. That doesn't matter. We don't need to know how much the collection agencies are making; we're talking about how much they pay the company"”which happens before they ever make a dime, themselves. They pay the company 15%. After that, they own the debt. However much they end up making on it is irrelevant.

(D) confuses the 15% of debt for 15% of customers; those are different quantities, and 15% of customers tells us nothing. Maybe 15% of customers together constitute 1% of debt. Maybe another 15% constitutes 90% of debt.

(E) is likewise irrelevant. It doesn't say anything about collection agencies and companies.

Finally, to go back to (C) and answer your question:

To use a simpler example, suppose I took a test with 100 questions, and I told you: I was unsuccessful in getting only 15 questions wrong.

What does that mean? If I got 86 questions right, 14 wrong, then wasn't I 'unsuccessful in getting only 15 questions wrong?' (I'm interpreting 'only' as 'exactly' here, which is the part I'm unsure of).

You're right to be confused by your example because it is quite confusing! I suppose what that would have to mean is that you DIDN'T get 15 questions wrong. You got 14 or fewer. (Note that none of this actually matters in getting rid of Answer (C) for the reasons I wrote above.)

Here, to be unsuccessful at collecting only 15 percent of bills means they collect 85%; they're only unsuccessful 15% of the time.

[GorgeW295]

What exactly does (c), "collection agencies that are assigned bills for collection by companies are unsuccessful in collecting, on average, only 15 percent of the total amount of those bills", exactly mean?

Does it mean that they are unsuccessful, to the extent that on average they collect less than 15 percent of the total amount?

I'm a bit thrown off, because if you drop the "on average" phrase, then "unsuccessful in collecting only 15 percent of the total amount of those bills" seems like the target is exactly 15 percent, and that they could be "unsuccessful" by collecting 30 percent.

I think they missed the notifications which are related to their bills. The collection agency follows the debt collection process for collecting money. They have some limited rights so they can utilize those n them. If they missed or ignored the notifications then this might be caused some serious problems to them. They have to talk with the creditors and they can take some time for paying back otherwise they may bring them to the court.

[Laura Damone]

The phrasing of C is really ugly, and a little ambiguous, but I'm pretty sure that it means this: collection agencies can rightly be deemed "unsuccessful" because they collect, on average, only 15% of the total amount of the bills they're assigned.

You can't be "unsuccessful in collecting only 15%" of something "on average." You can be unsuccessful in collecting more than 15% on average (meaning you get, on average, 15% or less). You can be unsuccessful in collecting exactly 15% on average (meaning you get, on average, more or less than 15%). And you can be unsuccessful at collecting at least 15% on average (meaning you get, on average, less than 15%). But you can't be unsuccessful at collecting only 15% of something on average. That would imply that you're collecting, on average, more or less than 15% of that thing, essentially making "only" a substitute for "exactly." "Only" is a conditional logic word, and it's tested throughout every exam in various ways. But in all those tests, I've never seen it used as a stand-in for "exactly."

If the writers were being nice, they would have put a comma after "unsuccessful" to indicate a pause. That would have made the meaning more clear.

But like my colleague Mary said about this answer way back when, none of this really matters in answering the question. The question is about what percentage the collection agencies will pay to the companies, and whether the companies might be better off collecting themselves. What percentage the collection agencies actually collect is irrelevant, because they pay the companies 15 % regardless.

Hope this helps!