Carl2291 said:
If it's making even a slight profit... Then it's worth it |
Not always.
Time is the importaint resource. You can make more money. You can not make more time. Now, typically, under Managerial Accounting, you keep a product line so long as they contribute enough to the fixed cost where you'd lose more money if yuo discontinue it. However, for big companies, they demand higher margins and profits to keep going.Microsoft's investors are upset now because they are focusing on a game console with low margins when they should focus on Windows with a very high margin. In this case, investors want Microsoft to focus more on where they can make the most money. Even if the XBox line is profitable, they want to leave the lower margins behind and focus on the better profit capabilities of Windows (although, Window's probably contributes more to the fixed cost anyway since it has like a 70% margin).
