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What inference is made from the premise "We must reduce our budget due to the significant cost overruns we experienced during production"?

  1. The budget should be increased

  2. We should invest more

  3. No action is needed

  4. We must reduce our budget

The correct answer is: We must reduce our budget

The correct answer is D, "We must reduce our budget." This is because the premise specifically states that the budget must be reduced due to significant cost overruns during production. The inference drawn from this premise is that a reduction in the budget is necessary to address the financial challenges resulting from the cost overruns. Options A, B, and C are not supported by the information provided in the premise. Option A suggests increasing the budget, which contradicts the need for a reduction stated in the premise. Option B suggests investing more, which is not directly related to budget cuts in response to cost overruns. Option C proposes taking no action, which is not a logical inference given the financial difficulties highlighted in the premise.