XYZ Company has four sales territories and is considering eliminating the Great Lakes Region which had sales of $110,000, direct expenses of $70,000 and indirect expenses of $60,000. If the Great Lakes Region is eliminated, 80% of the indirect expenses would still remain. If this region were to be eliminated, the company's overall net income would be:

Multiple Choice

• $10,000 higher.

• $12,000 higher.

• $28,000 lower.

• $40,000 lower.