Question: 1. What is the difference between avoidable and unavoidable expenses?
2. A segment is a candidate for elimination if
(a) its revenues are less than its avoidable expenses,
(b) it has a net loss,
(c) its unavoidable expenses are higher than its revenues.
3. What is the average amount invested in a machine during its predicted five-year life if it costs $200,000 and has a $20,000 salvage value? Assume that net income is received evenly throughout each year and straight-line depreciation is used.