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EXAMPLE 4 A company has a contract to operate bus services within the Rainbow Valley area. It operates on six routes of which two routes

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EXAMPLE 4 A company has a contract to operate bus services within the Rainbow Valley area. It operates on six routes of which two routes are uneconomical to operate. The company has to operate all six routes and cannot cease operating the uneconomical routes. Even though the cash flows from each of the bus routes can be identified, all six routes are treated as a single cash-generating unit as the bus company has to operate all or none of the routes

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