A company has three product lines, one of which reflects the following results:

Sales	$430,000
Variable expenses	250,000
Contribution margin	180,000
Fixed expenses	280,000
Net loss	$ (100,000)

If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will

increase by $100,000.

decrease by $180,000.

decrease by $12,000.

increase by $12,000.