Fat Tire Bicycle Company currently sells 35,000 bicycles per year. The current bike is a standard balloon-tire bike selling for $120, with a production and shipping cost of $30. The company is thinking of introducing an off-road bike with a projected selling price of $390 and a production and shipping cost of $225. The projected annual sales for the off-road bike are 15,000. The company will lose sales in balloon-tire bikes of 9,500 units per year if it introduces the new bike, however. What is the erosion cost from the new bike?

$285,000

$1,140,000

$1,567,500

$2,137,500

$855,000