3A Kneller Knitwear Inc. is considering the addition of a new line of socks next year. First year sales of Tuff-Stuff socks are projected at 3 million pair. The table below provides price and cost data. The sources of these sales are expected to be: 15% of sales to new customers, 45% to competitors, customers and 40% to previous buyers of Knel lers other brand "Socko." Sales of Socko totaled 2 million pair this year and are expected to remain at this level if Tuff-Stuff is not introduced. Dan Douglas, manager of the Sock Division, is concerned about the cannibalization of Socko sales by Tuff-Stfff. How would t introduction of Tuff-Stuff affect Kneller's net profit? Should Tuff-Stuff be introduced? Current Year Year 1 with New Line Socko Socko Tuff-Stuff $1.90$1.90 Factory Selling Price Variable Costs Fixed Costs $2.35 $1.15$1.60 $825,000.00 $645,000.00 $1,510,000.00 $1.15