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How would this decision affect your division profits

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Reference no: EM133017469

Question - Freeman Company has five divisions, and you are the division manager of one of these divisions. Assume that the Administrative Costs for Freeman Company represent corporate-sustaining fixed costs that are allocated to each division based on the division's total assets. These costs represent long term commitments that cannot be changed within the next two years. Freeman Company decides to shut-down on of the other divisions (not your division) and dispose of the shut-down division's assets.

A. How would this decision affect your division's profits? Make sure you explain your logic.

B. Describe how your answer to Part A relates to the interdependency problem of motivating performance.

C. Describe how your answer to Part A relates to the death spiral phenomenon.

Reference no: EM133017469

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