Using a responsibility income statement
Shown below is the current monthly income statement of Metro Video,by profit centers: 
On the basis of this information,compute the increase in monthly income from operations that may be expected to result from each of the following actions:
(a)Spending $5,000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35%.$________________
(b)Closing the Equipment Sales Department and allowing the Video Rentals Department to expand is expected to increase the revenue of the Video Rentals Department by $105,000 per month.This action also is expected to increase fixed costs traceable to the Video Rentals Department by $40,000 per month.$_______________
Definitions:
Cost Of Capital
The rate of return a company must earn on its investments to maintain its market value and attract funds.
Lump Sum
A one-time payment made for a particular purpose, rather than recurring payments over time.
Future Value
The amount of money an investment is expected to grow to over a period of time when interest or dividends are reinvested.
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