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Consider the Following Portion of a Segmented Income Statement for the Year

question 68

Multiple Choice

Consider the following portion of a segmented income statement for the year just ended.Assume fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses. Consider the following portion of a segmented income statement for the year just ended.Assume fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses.   What is X's divisional segment margin? A) ($10,000)  B) $40,000 C) $10,000 D) $100,000 What is X's divisional segment margin?

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Definitions:

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Internal Rate

The rate of return that makes the net present value of all cash flows from a particular project equal to zero.

Payback Period

The length of time that it takes for a project to fully recover its initial cost out of the net cash inflows that it generates.

Investment

Allocation of capital or resources to assets with the expectation of generating profit or income.

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