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Why does downsizing a company by closing segments that report accounting loss often leads to decrease in profits for the company rather than an increase?
Why does downsizing a company by closing segments that report accounting loss often leads to decrease in profits for the company rather than an increase?
Common fixed costs allocated to the segment being closed |
Excessive reserves taken in previous years | ||
Direct material costs associated with the segment being closed | ||
Additional restructuring costs due to closure of a segment |
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