Lily's Library analyzes profitability of three segments: book sales, caf, and events. The financials are: Segment Revenue Direct Costs Book Sales $600,000 $360,000 Caf $150,000

Lily's Library analyzes profitability of three segments: book sales, café, and events. The financials are:

Segment	Revenue	Direct Costs
Book Sales	$600,000	$360,000
Café	$150,000	$90,000
Events	$80,000	$50,000

Lily is contemplating turning the events area into an expanded café area.

Required: a. Calculate the necessary increase in the café segment margin to maintain Lily’s Library’s current income. b. Identify other considerations Lily should evaluate before deciding to eliminate the events area to expand the café area.