Indicate whether each of the following statements is true or false.In making a decision to eliminate a segment of a business, managers should compare differential revenues for the segment to its avoidable costs._____Eliminating one segment of a business generally has no effect on the other segments._____Eliminating one segment of a business has no effect on the customers of the other segments._____The opportunity cost, alternative use for facilities, should be considered in deciding whether to retain a segment of a business._____A decision to eliminate a segment of a business is likely to have long-term consequences because re-establishing the segment might be difficult._____
What will be an ideal response?
| In making a decision to eliminate a segment of a business, managers should compare differential revenues for the segment to its avoidable costs. | T |
| Eliminating one segment of a business generally has no effect on the other segments. | F |
| Eliminating one segment of a business has no effect on the customers of the other segments. | F |
| The opportunity cost, alternative use for facilities, should be considered in deciding whether to retain a segment of a business. | T |
| A decision to eliminate a segment of a business is likely to have long-term consequences because re-establishing the segment might be difficult. | T |
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