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## Can an Expert Please Rate my AWA

tagged by: OWN

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OWN Junior | Next Rank: 30 Posts
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Posted:
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#### Can an Expert Please Rate my AWA

Wed Dec 06, 2017 9:02 am
Hello!

If a GMAT expert could please rate my AWA and provide me with some feedback on how to improve, that would be great!

Prompt:

Quote:
The following appeared as part of the business plan of an investment and financial consulting firm.
“Studies suggest that an average coffee drinker’s consumption of coffee increases with age, from age 10 through age 60. Even after age 60, coffee consumption remains high. The average cola drinker’s consumption of cola, however, declines with increasing age. Both of these trends have remained stable for the past 40 years. Given that the number of older adults will significantly increase as the population ages over the next 20 years, it follows that the demand for coffee will increase and the demand for cola will decrease during this period. We should, therefore, consider transferring our investments from Cola Loca to Early Bird Coffee.”
My Response:

The argument that the financial consulting firm should transfer its investments from Coca Loca to Early Bird Coffee is flawed. The argument not only presupposes, without evidence, that the population age distrubtion will include a greater number of older adults in the next 20 years, but also assumes that Coca Loca and Early Bird Coffee are representative of the beverage market as a whole. This dissection of the argument presents both these flaws and explains how the flaws may be remedied to develop a sound argument.

Firstly, the claim that there will be a marked increase in the number of older adults over the next 20 years is presented with no supporting evidence. This claim assumes that the number of older adults will increase as the population ages; whether this claim is based on the assumption that the rate of aging exceeds the death rate in older individuals or on the notion that the current generation of younger individuals is simply more populated remains unlcear. In either case, or even if the author intended to imply both, there is simply no evidence presented to support this prediction. As such, this speculation cannot be established using the available information.

Secondly, the argument assumes that Coca Loca and Early Bird Coffee are representative of the cola and coffee markets, respectively. This assumption is unsupported in the argument since the authors provided no information that could support a claim that either company will grow or decline. In this instance, the authors do not justify whether these two companies can be expected to behave a certain way and the business plan makes no mention of whether investments in Early Bird Coffee are currently underpriced. Even if the prediction that coffee demand will rise as cola demand falls is correct, there is no evidence that supports the notion that demand for Cola Loca or Early Bird Coffee will follow suit, nor is there evidence indicating the potential return on investment for either company.

To remedy the argument, the author needs to address the argument's gaps to establish a better foundation for the argument's assumptions. In the case of the population predictions, the business plan should present evidence that supports the claim that the number of older adults will significantly rise over the next two decades. To accomplish this goal, the author could present population data that shows an increased number of younger people in the current generation relative to the previous generation. Alternatively, the author could present trends that strongly indicate an increased lifespan for older adults over the next two decades. In either case, the author's data must be specific to the markets being discussed and should be based on a representative dataset. To address the issue of representativeness, the author could include specific company information that forecast a decline in investment value for Coca Loca and a rise in investment value for Early Bird Coffee. Once again, this data should be based on the specific markets that the two companies serve.

The argument that the financial consulting firm should transfer its investments is flawed. The argument is based on predictions that are unsupported and the recommendation assumes that two specific companies are representative of the overall demand predictions presented earlier in the argument. Until evidence is presented to support both notions, the argument is incomplete and should not be the basis for a specific course of action.

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