A company is currently selling two products (A and B) and is considering introducing a new product in 2022.

The new product is expected to sell at a retail price of $59.00, with retail margins of 20% on cost. At that price, the company expects to sell 800,000 units in the first year. The total variable costs for the new product amount to $14,300,000, and total fixed costs are $9,560,000.

The new product is likely to cannibalize some of the existing products in the company's portfolio. More specifically, it is likely to reduce the sales of product A and product B (see expected cannibalization rates for each product in table bellow). Given the significant cannibalization threat, the company needs to assess whether the introduction of the new product makes financial sense for the organizations overall bottom line.

	Product A (projected data for 2022)	Product B (projected data for 2022)
Sales volume	980,000	1,144,000
Manufacturing price	$23.77	$19.00
Total variable cost	$12,100,000	$10,750,000
Expected cannibalization rate due to introduction of the new product	15%	22%

What is the expected profit for the new product for 2022 (year end)? * Don't forget to consider cannibalization costs of product A and product B