What Will Most Likely Occur If a Company Eliminates an Unprofitable

question 199

Multiple Choice

What will most likely occur if a company eliminates an unprofitable segment when a portion of fixed costs are unavoidable?

• A) All expenses of the eliminated segment will be eliminated.
• B) Net income will decrease.
• C) Net income will increase.
• D) The company's variable costs will increase.

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Definitions:

Volatility

A statistical measure of the dispersion of returns for a given security or market index, often associated with the level of risk involved.

Probability Range

A span of values within which a probable outcome is expected to occur, often expressed as a percentage.