What Decision Rule Should Be Followed When Deciding If a Business

question 97

Multiple Choice

What decision rule should be followed when deciding if a business segment should be eliminated?

• A) Segments generating a net loss should always be eliminated.
• B) Segments with revenues which are more than avoidable expenses should be considered for elimination.
• C) Segments with revenues which are more than unavoidable expenses should be considered for elimination.
• D) Segments with revenues which are less than avoidable expenses should be considered for elimination.
• E) Segments with revenues which are less than unavoidable expenses should be considered for elimination.

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Definitions:

Less Risky Career

A professional path that is perceived to have a lower probability of failure or loss.

Equal Incomes

The economic condition in which all individuals or entities earn the same amount of income.

Entrepreneurship Educators

Individuals or institutions dedicated to teaching and training aspiring entrepreneurs, covering aspects of business creation, management, and innovation.

Expertise, Wisdom

The comprehensive knowledge or skill in a particular area combined with the judgement and experience to use such knowledge wisely.