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The Kelsh Company has two divisions-North and South. The divisions have the following revenues and expenses: Management at Kelsh is pondering the elimination of the
The Kelsh Company has two divisions-North and South. The divisions have the following revenues and expenses: Management at Kelsh is pondering the elimination of the North Division. If the North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. Given this data, you will advise: To eliminate North division, as the company profitability will immediately improve by $50,000. To eliminate North division, as the company profitability will improve by $260,000. To keep North division, as its eliminution will turn the company from profitable to unprofitable. To keep North division, as its elimination will be too complicated and will bring just a little improvement in companys profitability
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