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A Company has 2 divisions: The Good Division shows Net Income of $400,000, The Not So Good Division has a Net Loss of $300,000. Now
A Company has 2 divisions: The Good Division shows Net Income of $400,000, The Not So Good Division has a Net Loss of $300,000. Now the Not So Good was charged allocated fixed costs of $200,000. If the Not So Good Division closed, the allocated fixed costs will Not Be Eliminated.
*But, If the Not So Good Division is closed immediately, will my company become:
A. More profitable by $300,000
B. More profitable by $200,000
C. More profitable by $100,000
D. Less profitable by $ 100,000
E. Less profitable by $300,000
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