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A Division earns a contribution margin of $200,000 and has a division margin of $100,000. If Pegasus Division is closed, the firm can eliminate all
A Division earns a contribution margin of $200,000 and has a division margin of $100,000. If Pegasus Division is closed, the firm can eliminate all of the direct division expenses and $125,000 of common expenses. How will closing the division affect the firm's operating income? Select one: a. Lower operating income by $75,000 b. Increase operating income by $75,000 c. Lower operating income by $35,000 d. Increase operating income by $25,000
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