Jake's Auto Sales Currently Sells $3

Jake's Auto Sales currently sells $3.4 million of new vehicles and $1.7 million of used vehicles a year. Jake is considering expanding his operations and adding an imported car to his lineup. Should
He do this, he expects to sell $680,000 worth of imported cars per year. However, he also expects
To lose about $450,000 of his upper end current sales. The expansion will necessitate spending
$78,000 to add an additional showroom onto the current facility. What is the erosion cost
Associated with this expansion project?

A) $230,000
B) $308,000
C) $372,000
D) $450,000
E) $528,000