When a Segment of a Business Consistently Shows Net Losses

question 94

Multiple Choice

When a segment of a business consistently shows net losses, it should:

• A) Definitely be dropped
• B) Be dropped only if its contribution to overall company profits is negative
• C) Be dropped only if contribution margin exceeds fixed costs
• D) Never be dropped

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Definitions:

Hourly Wage

Compensation paid to an employee based on the number of hours worked.

Secret Profit

Gains obtained by an individual, often an agent or fiduciary, without the knowledge or consent of the principal or beneficiary they represent.

Duty Of Loyalty

An obligation of fiduciaries to act in the best interest of the party they owe the duty to, often in contexts such as corporate governance.

Real Estate Investment

The act of allocating financial resources into real estate properties with the expectation of generating income through rental yields or capital gains.