Cereals Inc. is deciding whether to eliminate their whole grain cereal segment due to a lack of demand. The segment currently operates at a net loss of $5,000 according to their income statement. The segment has revenue of $25,000. Expenses associated with the segment include Cost of Goods Sold $22,000 and fixed expenses of $8,000 representing the allocation of the CEOs salary to the division.

Should Cereals Inc. eliminate the whole grain cereal segment?

Group of answer choices

Yes, because eliminating the segment will increase the companys net income by $13,000

No, because eliminating the segment will reduce the companys net income by $3,000

Yes, because eliminating the segment will increase the companys net income by $5,000

No, because eliminating the segment will reduce the companys net income by $25,000