Asked by Justin Brady on Jun 04, 2024
Verified
When a segment of a company is showing a net loss, it is always best to discontinue the segment in order not to continue with losses.
Net Loss
The amount by which total expenses exceed total revenues in a company during a specific period, indicating a financial loss.
Discontinue
To discontinue means to stop producing, selling, or providing a product or service, often permanently.
- Assess the impact of discontinuing a segment or product on the company's net income.
Verified Answer
ZK
Zybrea KnightJun 07, 2024
Final Answer :
False
Explanation :
Discontinuing a segment should not be the first solution to losses. Other options such as restructuring or improving the segment's operations could be explored before considering discontinuation. Discontinuing a segment could also result in lost opportunities for future profits or lead to negative impacts on the company's overall operations.
Learning Objectives
- Assess the impact of discontinuing a segment or product on the company's net income.
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