If one of four distribution channels is discontinued, corporate-sustaining costs such as general administration costs will most likely be reduced by 25%.

Question

Quizplus · Accepted Answer

The discontinuation of one distribution channel may not necessarily lead to a 25% reduction in corporate-sustaining costs such as general administration costs. Other factors such as the size and complexity of the company, the extent of overlap between channels, and the need for alternative investments and restructuring may also impact the level of cost reduction. Therefore, the statement is too general and cannot be assumed as true in all cases.

If One of Four Distribution Channels Is Discontinued, Corporate-Sustaining Costs