The Terme Corporation is contemplating the purchase of new equipment, which may potentially increase revenues by 25%. Currently, sales are $750,000 per year and variable costs are 55% of sales. The equipment is expected to last for 5 years with no residual value. The cash outflow expected at the beginning of the year is $357,500. By how much would Terme's annual gross profit increase if the investment is undertaken?

a)$750,000 b)84,375 c)187,500 d)$103,125