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Your company currently sells 500,000 units annually from brand x, which is a base brand. The selling price is $10 and the variable cost is

Your company currently sells 500,000 units annually from brand x, which is a base brand. The selling price is $10 and the variable cost is $3. Your company plans to introduce a new premium brand, brand y, which will be sold at $12 and the variable cost is $6. The annual projected volume is 500,000 for brand y and it is expected cannibalize 300,000 units of brand x. Calculate the financial effect of introducing brand.

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