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Unformatted text preview: Laura Stroup Acct II Professor Woodward actually not be a smart move because although Ketchum Division is not profitable, it would cause the total net inc 157,740) 140,870-110,670=$30,200 loss Key to income analysis: any time a division has a positive contribution margin, y Payment X Factor = Present Value 13300+(240,000/6)=cash:$53,300 53,000 X ? = 240,000 ? = 240,000/53,000 ? = 4,503 ? = 9% Payback Method: Project A Project B (200,000/50,000)= 4 (300,000/65,000)=4.6 B) Project A because it has a shorter payback method come to decrease. you're better off keeping it. Also, whenever you drop a division, your fixed costs don't go away....
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This note was uploaded on 07/14/2008 for the course BUSN 201 taught by Professor Rundle during the Spring '08 term at Biola University.
- Spring '08