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ABC Company licenses proprietary software and provides service agreements to corporate customers. The company has examined product-line information for the company, and they are concerned

  1. ABC Company licenses proprietary software and provides service agreements to corporate customers. The company has examined product-line information for the company, and they are concerned with sales to smaller firms. The data is ($thousands, 2012):

On further inquiry, they found out that many of the shared expenses were simply allocated evenly between the two types of firms.

Because of its apparent non-profitability, they want some advice as to whether to stop serving the small firm market. What would you recommend and why?

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