Business, 20.06.2020 21:57, calah1193

Hyperion Inc., currently sells its latest high-speed colour printer, the Hyper 500, for $ 371. Its cost of goods sold for the Hyper 500 is $ 212 per unit, and this year's sales (at the current price of $ 371) are expected to be 22 comma 000 units. Hyperion plans to lower the price of the Hyper 500 to $ 318 one year from now. a. Suppose Hyperion considers dropping the price to $ 318 immediately, (rather than waiting one year). By doing so it expects to increase this year's sales by 24 % to 27 comma 280 units. What would be the incremental impact on this year's EBIT of such a price drop? b. Suppose that for each printer sold, Hyperion expects additional sales of $ 81 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 62 % on ink cartridges. What is the incremental impact on EBIT for the next three years of dropping the price immediately (rather than waiting one year)?

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Hyperion Inc., currently sells its latest high-speed colour printer, the Hyper 500, for $ 371. Its c...