What happens if an unprofitable segment is eliminated?

A : it is impossible for net income to decrease.

B : fixed expenses allocated to the eliminated segment will be eliminated.

C : it is impossible for net income to increase.

D : variable expenses of the eliminated segment will be eliminated.

D : variable expenses of the eliminated segment will be eliminated.

Explanation:

When a segment is closed, then the variable expenses will not incur as no manufacturing will be done now, although certain fixed expenses cannot be ignored as these expenses will be occurred no matter if the production is done or not, like common rent for building.

That includes different segments also.

As the efforts of labor will move from that segment to another, that is more profitable segments, there will be increase in net income, also that the variable expenses will be avoided, because of no production.