Dropping Unprofitable Department Penn Corporation has four departments, all of which appear to be profitable except department 4. Operating data for the year are as follows: a. Calculate the gross profit percentage for departments 1-3 combined and for department 4. Department 1-3 % Department 4 % b. What effect would elimination of department 4 have had on total firm net income? (Ignore the effect of income tax.) The firm's net income would be: q k
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