medium · GMAT Verbal Reasoning
A study found that companies offering unlimited vacation time have 20% higher annual profits than companies with fixed vacation policies. Therefore, any company seeking to increase its profitability should adopt an unlimited vacation policy.
The reasoning in the argument is flawed because it:
- assumes without justification that no company has ever failed after adopting such a policy.
- relies on a sample of companies that is likely to be unrepresentative of the global economy.
- fails to consider that unlimited vacation policies might be difficult for small businesses to administer.
- uses the term 'profitability' in two different senses within the same argument.
- mistakes a correlation between two factors for a causal relationship between them.
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