1. A product line or business segment should be eliminated whenever a. the product line's sales revenue exceeds its total variable costs. b. the product line produces a net loss after deducting fixed costs from its c. contribution margin. the product line's fixed costs remain, and its total variable costs are more than its sales revenue. d. the product line produces a net loss after fixed and variable costs are deducted from its sales revenue. 2. Canadian Railroad needs a locomotive (asset). Canadian can purchase (buy) a new locomotive from General Electric for $720,000. Maintenance expenses for the new locomotive will be $5,500 per year for its useful life of 7 years. Alternatively, American Railroad has offered to lease a slightly used locomotive to Canadian for 7 years for a total of $740,000 with no additional costs or expenses. After 7 years both locomotives will have no residual value. What will be the effect on net income for 7 years if Canadian leases the locomotive from American instead of buying the locomotive? a. $ 20,000 increase b. $14,500 increase c. $ 14,500 decrease d. $18,500 increase