Why May Management Justifiably Hesitate to Close a Service

question 61

Multiple Choice

Why may management justifiably hesitate to close a service:

• A)because of emotional attachment to providing the service.
• B)because the loss made in providing one service can be compensated by the profit made by providing other services.
• C)because closing one service may lead to a decline in the demand of other services.
• D)all of the above.

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Definitions:

Impairment Loss

An impairment loss occurs when the carrying amount of an asset exceeds its recoverable amount, leading to a reduction in the asset’s value on the balance sheet.

Undepleted Acquisition Differential

Undepleted Acquisition Differential refers to the portion of the differential from an acquisition that has not yet been amortized or allocated to the acquired company's assets and liabilities.

Voting Shares

Stocks that provide the owner with the ability to influence corporate decisions and elect the board of directors through voting.

Patent

A legal right granted by the government to an inventor, giving the inventor exclusive rights to use, sell, or manufacture the invention for a certain period of time.