Problem
You are provided with the following information relating to four different departments in a business. The four departments are in the same building, for which the business has signed a long-term lease.
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Department A
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Department B
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Department C
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Department D
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Revenue
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£100,000
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£120,000
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£60,000
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£80,000
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Costs
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(£50,000)
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(£80,000)
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(£80,000)
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(£90,000)
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Profit / Loss
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£50,000
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£40,000
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(£20,000)
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(£10,000)
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The business is thinking of closing one of the departments to save costs. Assume that the business's fixed costs of £100,000 are spread evenly among the cost figures of the four departments.
Which department should the business shut down?