Coronado Machines has four product lines, one of which reflects the following results:

Sales	$210000
Variable costs	111000
Contribution margin	99000
Fixed costs	111000
Net loss	$(12000)

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

It will increase by $12000.

It will decrease by $54600.

It will increase by $44400.

It will decrease by $42600.