Arvil Company owns 25% of Zelda Inc. and accounts for the investment using the equity method. During the year, Zelda Inc. reports a net loss of $890,000 and pays total dividends of $41,000.

Which of the following describes the change in Avrils investment in Zelda during the year?

Select one:

a. The investment increases by $181,500.

b. The investment decreases by $232,750.

c. The investment decreases by $222,500.

d. The investment decreases by $10,250.

e. None of the above