When a segment of a business consistently shows net losses, it should:

Question

Quizplus · Accepted Answer

Before dropping a segment of a business, it is important to assess its contribution to the overall profits of the company. If the segment shows net losses but still contributes positively to the overall profits, dropping it may hurt the company's bottom line. However, if the segment's contribution is negative, it may be more beneficial to drop it. Therefore, the best choice is B - the segment should only be dropped if its contribution to overall company profits is negative.

When a Segment of a Business Consistently Shows Net Losses