Lincoln, Inc. is considering the introduction of a new music player with the following price and cost characteristics:

Sales price $ 125 each

Variable costs 75 each

Fixed costs 180,000 per year

Projected sales are 7,500 units per year.

Required: (consider each question independent of each other):

(a) What will the operating profit be?

(b) What is the impact on operating profit if the selling price per unit decreases by 15%?

(c) What is the net income if variable costs per unit increase by 15% and Lincoln has a 38% tax rate?