Our company is split into two business units: Dacker and Cabell. Each business unit is a responsibility center, with a top business-unit manager in charge of most operating and investment decisions for the business unit. The two top business-unit managers are evaluated based on various performance metrics, including Residual Income (RI).

Next year's estimated income statement (in contribution format) for the company is below:

Business Unit

Dacker Cabell Total

Total Revenues $3,200,000 $1,200,000 $4,400,000 Total Variable Costs 1,500,000 500,000 2,000,000

Total Contribution Margin $1,700,000 $700,000 $2,400,000 Total Fixed Costs 1,300,000 900,000 2,200,000

Net Operating Income $400,000 ($200,000) $200,000

Because of the poor expected performance of the Cabell business unit, we are considering shutting it down. There are two complicating factors. First, $90,000 of the Cabell business unit's Total Fixed Costs are allocations of corporate-level expenses that will have to be reallocated to the Dacker business unit. Second, several of the Cabell business unit's large customers also buy from our Dacker business unit; they indicated that they would stop doing business with Dacker if Cabell is shut down. Our estimate is that this would reduce Dacker business unit's sales by 10%.

If we drop the Cabell business unit, our estimated effect on our company's next year's NOI is closest to: A. Decrease in NOI of $130,000

B. Decrease in NOI of 30,000

C. Decrease in NOI of $60,000

D. Increase in NOI of $30,000

E. Increase in NOI of $100,000