1. Lowes sells a variety of it house brand Kobalt tool cabinets. Lowes currently sells two models: the model 3000 and the model 3100. The model 3000 costs Lowes $249.00 and sells for $479.99. Last year, Lowes sold 411 units of the model 3000. The other offering, the model 3100, sells for $569.99 and costs Lowe$329.00. Last year, Lowes sold 638 units of this pressure washer.

   The Kobalt line is considering introducing the model 3200. This model would cost Lowes $177.00. Lowes management would price this model at $389.99. Lowes management knows that demand is growing for the larger capacity cabinet. Based on such considerations, they project the model 3200 will sell 360 units. However, Lowes management expects the new model to cannibalize some of the existing Kobalt cabinets. They forecast that seventy-five percent of the new models forecasted sales will come from the model 3000; fifteen percent will come from the model 3100. The remaining sales will be new sales. If Lowes elects to sell the new model, what will be the incremental contribution to the Kobalt cabinet line?

   		$1,237.55
   		$1,295.64
   		$1,322.33
   		$1,373.92