Use Critical Thinking to Address the Key Issue

question 82

Essay

Use critical thinking to address the key issue.
-A company accused of downsizing workers defended itself with the following statement: "Yes, we were forced to lay off 20% of our workforce last year, but this year we increased our workforce by 20%, and we therefore now have the same number of employees as before the layoff." What is the flaw in this argument?

---

Definitions:

Sinking Fund Bonds

Bonds that include a provision requiring the issuer to set aside funds regularly to repay the bond at maturity.

Principal

The primary amount of a loan or investment, excluding interest or profits.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified price.

Maturity

The point in time when a financial instrument or obligation, such as a bond or loan, becomes due and payment is required.