Romeros i understand all of that but a money losing

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disrupt service to customers. Romeros: I understand all of that, but a money-losing processing center on my performance report is completely unacceptable. Littlebear: And if you shut down Clayton, you are going to throw some loyal employees out of work. Romeros: That's unfortunate, but we have to face hard business realities. Littlebear: And you would have to write off the investment in the facilities at Clayton. Romeros: I can explain a write-off to corporate headquarters; hiring an inexperienced contractor to build the Clayton facility was my predecessor's mistake. But they'll have my head at headquarters if I show operating losses every year at one of my processing centers. Clayton has to go. At the next corporate board meeting, I am going to recommend the Clayton facility be closed. Required: 1. From the standpoint of the company as a whole, what is the financial advantage (disadvantage) of closing the Clayton processing center and redistributing its work to other processing centers in the region? Explain. 2. Why might it be in Haley Romeros's self- interest to shut down the Clayton facility? Do you think Haley Romeros is conducting herself in an ethical fashion? Explain. 3. What influence should the depreciation on the facilities at Clayton have on prices charged by Clayton for its services?
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  • Fall '19
  • Depreciation, Expense, Operating expense, Clayton Facility

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