Question

Hayworth Corporation has just segmented last year's income statement into its ten product lines. The chief executive officer (CEO) is curious as to what effect dropping one of the product lines at the beginning of last year would have had on overall company profit. What is the best number for the CEO to look at to determine the effect of this elimination on the net operating income of the company as a whole

Answer 1

The correct answer to the following question will be "The product line's segment margin".

Step-by-step explanation:

• The recommendation to maintain as well as decline an established segment would be ascertained by a relevant research cost-benefit analysis and also the influence of the judgment on net cash flows or income.
• Only certain risks that can be minimized need to be included in the analysis of the execution.

So that the above is the right answer.