Lenovo Inc. is considering discontinuing their Thinkpad laptop division, because it is reporting a loss. Currently, Thinkpad is generating sales of $200,000, with variable costs of $150,000 and

fixed costs of $80,000. Therefore, it is reporting a loss of $30,000. Is Lenovo correct in discontinuing the Thinkpad division?

a.Yes, because the companys net income will increase by $30,000 if discontinued

b. No, because the companys net income will decrease by $25,000 if discontinued

c. No, because the companys net income will decrease by $50,000 if discontinued

d. Yes, because the Thinkpad is an awful laptop

e. None of the above

Please explain why