Power IncHas Two Divisions,Windsor and Ridge

question 36

Multiple Choice

Power Inc.has two divisions,Windsor and Ridge.Following is the income statement for the past month: What would Power's profit margin be if the Windsor division was dropped and all fixed costs are unavoidable?

• A)$0
• B)$80,000 loss
• C)$42,00 profit
• D)$80,000 profit

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Definitions:

Merchandise Sold

Goods that have been sold and delivered to customers, generating revenue for the selling company.

Free Cash Flow

It refers to the amount of cash a company generates after accounting for capital expenditures, such as buildings or equipment. This cash can be used for expansion, dividends, or other purposes.

Cash Flows

The total amount of money being transferred in and out of a business, especially affecting liquidity.

Obsolete

Referring to a product, service, or technology that has become out of date or no longer in use.