110. The following appeared as part of a memorandum¹ from the loan department of the Frostbite National Bank.
“We should not approve the business loan application of the local group that wants to open a franchise² outlet³ for the Kool Kone chain of ice cream parlors⁵. Frostbite is known for its cold winters, and cold weather can mean slow ice cream sales. For example, even though Frostbite is a town of 10,000 people, it has only one ice cream spot — the Frigid⁶ Cow. Despite the lack of competition, the Frigid Cow’s net revenues fell by 10 percent last winter.”
Frostbite国家银行的借贷部门的备忘录：
我们不应该批准那个希望开一家KK冰激凌连锁店的特许店的本地团体的借贷请求。Frostbite以其寒冷的冬天而闻名，而冷天气意味着冰激凌的销售不利。比如，虽然Frostbite是个有10000人的镇子，它却只有一家冰激凌店Frigid Cow。尽管缺乏竞争，Frigid Cow的净收入去年冬天下降了10％。
1.    Other factors in deciding whether to give loan to a company such as the credit of the company should be considered.
2.    Admittedly, the former and prospective⁷ performance of the company is also important when the bank have to make decision of whether or not should it give loan to a company. However, the author of the memorandum show no sufficient evidence to support his or her proposal that the bank should not give loan to Kool Kone chain of ice cream parlors.
3.    The statistics last year does not necessarily denote the future trend.
 
1.    排除他因，净收入下降的原因是什么？可能是经营不好，草率定价，甚至正因为缺乏竞争导致了这些。
2.    寒冷冬天不等于没有夏天，也不等于夏天短暂。不能说明原因。
 
In this memorandum the loan department of Frostbite National Bank recommends against approval of a business loan to a local group that wants to open an ice cream parlor⁴. In support of this decision the loan department points out that Frostbite has a reputation for cold winters and sales of ice cream decrease in cold weather. This latter point is buttressed⁸ by the fact that Frostbite’s only ice cream parlor suffered a 10 percent decline in net revenues the previous winter. The loan department’s decision is questionable⁹ for the following reasons.
To begin with, since it is reasonable to expect a decline in ice cream sales during winter months, it is difficult to assess the relevance¹⁰ of the fact that Frostbite has cold winters to the potential success of the Kool Kone franchise. Common sense suggests that this fact would be significant only if it turned out that Frostbite’s winter season lasted 9 or 10 months as it does in arctic regions. In that case slow sales could be expected for most of the year and the loan department’s opposition¹¹ to the loan would be readily understandable. If, on the other hand, Frostbite’s winter season lasts only a few months and the remainder of the year is warm or hot, it is difficult to comprehend the loan department’s reasoning.
Next, the loan department assumes that the Frigid Cow’s decline in net revenue last winter was a result of slow sales occasioned by cold weather. While this is a possible reason for the decline, it is not the only factor that could account for it. For example, other factors such as poor business practices or lack of inventory¹² could be responsible for the Frigid Cow’s loss of revenue. The loan department’s failure to investigate or even consider these and other possible explanations for the Frigid Cow’s decline in revenue renders their decision highly suspect.
In conclusion, the loan department’s decision is ill-founded. To better evaluate the decision, we would need to know more about the length and severity of Frostbite’s winter season. Moreover, evidence would have to be provided to support the assumption that the Frigid Cow’s loss of revenue last winter was a direct result of the cold weather.

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