Hyperion Inc., currently sells its latest high-speed color printer, the Hyper 500, for $357. It plans...

Transcribed Image Text:

Hyperion Inc., currently sells its latest high-speed color printer, the Hyper 500, for $357. It plans to lower the price to $302 next year. Its cost of goods sold for the Hyper 500 is $204 per unit, and this year's sales (at the current price of $357) are expected to be 21,600 units. a. Suppose that if Hyperion drops the price to $302 immediately (rather than waiting one year) it can increase this year's sales by 21% to 26,136 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 $56 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 84% on ink cartridges. What is the incremental impact on EBIT for the next three years of such a price drop? a. Suppose that if Hyperion drops the price to $302 immediately (rather than waiting one year) it can increase this year's sales by 21% to 26,136 units. What would be the incremental impact on this year's EBIT of such a price drop? The change in this year's EBIT is $. (Round to the nearest dollar. Enter a decrease as a negative number.) Hyperion Inc., currently sells its latest high-speed color printer, the Hyper 500, for $357. It plans to lower the price to $302 next year. Its cost of goods sold for the Hyper 500 is $204 per unit, and this year's sales (at the current price of $357) are expected to be 21,600 units. a. Suppose that if Hyperion drops the price to $302 immediately (rather than waiting one year) it can increase this year's sales by 21% to 26,136 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 $56 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 84% on ink cartridges. What is the incremental impact on EBIT for the next three years of such a price drop? a. Suppose that if Hyperion drops the price to $302 immediately (rather than waiting one year) it can increase this year's sales by 21% to 26,136 units. What would be the incremental impact on this year's EBIT of such a price drop? The change in this year's EBIT is $. (Round to the nearest dollar. Enter a decrease as a negative number.)

Answer rating: 100% (QA)

Current sales at 357 price 21600 units Revenue at current price 21600 357 7703200 Cost of goods sold ... View the full answer