Yvan Kabenga, President of Kabenga Limited is considering starting a new division to Kabengas Canadian operations. He is reviewing the projected financial statements for the proposed Cape Breton Division. The financial statement and additional information is presented below:

Cape Breton Division

Projected Income Statement

Year Ending June 30, 2022

Sales	$800,000
Variable expense	450,000
Contribution margin	350,000
Depreciation expense (1)	40,000
Property tax expense (1)	30,000
Administrative expenses (2)	80,000
Salary expense (3)	150,000
Advertising expense (4)	60,000
Overhead expense (5)	45,000
Utilities expense (3)	38,000
Net loss	$(93,000)

1. Relates to a new building and equipment required to start the new Division.
2. 30% relates directly to administration at the Cape Breton Division with the 70% remainder being allocated from Head Office.
3. Relates 100% to the Cape Breton Division.
4. 40% is advertising for the Cape Breton Division and the remaining portion is allocated from Head Office.

(5) 100% allocated from Head Office.

Required:

Should the Cape Breton Division be opened?