Krueger Company reported the following information for the most recent month:

Sales (10,000 units) $300,000

Variable expenses $180,000

NOI $ 50,000

What will happen to NOI if the selling price decreases by $.50 per unit, fixed expenses increase by $10,000 and the number of units sold increase by 5%?

1) NOI will decrease by $15,000

2) NOI will decrease by $79,250.

3) NOI will decrease by $9,250