year. The XYZ Ltd is a famous manufacturer of salty food snacks. The firm competes directly with the national brands including Frost, Oldboy and Rock Chips, but only in the capital city of Australia. Last year XYZ sold $30 million of its various chip products and hopes to increase its sales in the coming year by offering a new line of baked chips. The new product line is expected to generate $4.3 million in sales next year. However, the CFO of the company estimate that about 55% of this revenue will come from existing customers who switch their purchases from one of the firm's existing products to the new, healthier, baked chips. The tax rate is 30% and the deferred tax liability is $0.5 million in last machine in XYZ is purchased 5 years ago, with a historical cost $2m. Assuming the depreciation expense is calculated by using reducing balance method and the residual value for this machine is $1000 in 10 years. The fixed cost of producing chips is $100 million. Last year contribution margin ratio is 14.25%. What level of incremental sales should the company CFO attribute to the new line of baked chips? Select one: O a. $2,750,000 O b. $1,935,000 O c. $500,000 O d. $1,350,000