A company expects its three departments to yield the following income for next year.

Compute the change to the company's total net income if Dept. S is eliminated.

Question

A company expects its three departments to yield the following income for next year.

Compute the change to the company's total net income if Dept. S is eliminated.

Quizplus · Accepted Answer

Eliminating Dept. S would lead to a decrease in the company’s net income, which is equal to the income generated by Dept. S. 
According to the problem, we do not know the actual income of Dept S. However, it is given that eliminating Dept S would reduce the company's total net income by some amount. Therefore, only option (D) is valid. All other options either suggest an increase in the company's net income or a decrease that is different from $4,000.

A Company Expects Its Three Departments to Yield the Following