Multiple Choice QuestionThe decision rule for segment elimination is to eliminate a segment if income _____ from elimination. Multiple choice question.remains the samedecreasesincreases
Question
Multiple Choice QuestionThe decision rule for segment elimination is to eliminate a segment if income _____ from elimination. Multiple choice question.remains the samedecreasesincreases
Solution
The decision rule for segment elimination is to eliminate a segment if income increases from elimination. This is because the goal of any business is to maximize profit. If eliminating a segment increases overall income, it means that segment was operating at a loss and was dragging down total profitability. Therefore, the correct answer is "increases".
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