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

Sales	$199000
Variable expenses	111000
Contribution margin	88000
Fixed expenses	130000
Net loss	$ (42000)

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 companys net income will

decrease by $88000.

decrease by $10000.

increase by $10000.

increase by $42000.