Diamond Company Has Three Product Lines, A, B, and C

question 102

Multiple Choice

Diamond Company has three product lines, A, B, and C. The following financial information is available:Diamond is thinking of dropping Product Line C because it is reporting an operating loss. Assuming the company drops Product Line C and does not replace it, pre-tax operating income for the firm will likely:

• A) Be unchanged
• B) Increase by $1,200
• C) Increase by $1,500
• D) Decrease by $1,500
• E) Decrease by $2,700

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Definitions:

Retaliate

To respond to an action or injury with a similar action, typically for revenge or defense.

Hominins

Members of the human lineage after the split from our common ancestor with chimpanzees, including all species of Homo and related genera.

New World Monkeys

A group of primates that live in the forests of Central and South America, distinct from their Old World counterparts in Africa and Asia.

Old World Monkeys

A group of primates native to Africa and Asia, part of the family Cercopithecidae, often characterized by their non-prehensile tails.