Closing/Adding Branch Offices/Business Divisions Irrelevance with the Help of Myhomeworkhelp.com
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Closing, adding of branch offices and business divisions
Closing the business division has a severe impact on the working of the business. It makes it difficult to carry out the operations in the areas or divisions. Shutting of branch offices can also lead to loss of customers affecting the profits.
Adding a business division comes with following benefits-
- New customers
- Fresh environment
- Widen business operations
- Increase in the profit margin
The new branch possesses disadvantages too. However, these disadvantages are for a limited period. These Ares-
- Increase in the costs
- Difficulty in approaching customers
- Hindrances in developing the business operations
Thus, closing or adding branch offices or business divisions irrelevance of past costs and equipment replacement decisions homework help is better way to build homework.
Irrelevance of past costs
The irrelevant costs are the managerial term, which refers a cost. These costs can either be positive or negative which does not link to the case needing the management’s decision.
Thus, the irrelevant past costs are those past costs, which are managerial costs and can be positive or negative. These historical costs may or may not significant in present decisions.
Equipment Replacement Decision
The result to reinstate a equipment should be based on particulars and figures. These judgments, that the owner-manager of a diminutive company makes, should be the consequence of weighing costs.
Elements to remember before replacing the equipment
- Depreciation
- Interest
- Revenues
- Operating costs
- An annual average costs
- Old equipment
- The new equipment
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