Question: Hyperion Limited currently sells its latesthigh-speed colourprinter, the Hyper500, for $ 339. It plans to lower the price to $ 291 next year. Its cost

Hyperion Limited currently sells its latesthigh-speed colourprinter, the Hyper500, for $ 339. It plans to lower the price to $ 291 next year. Its cost of goods sold for the Hyper 500 is $ 194 perunit, and thisyear's sales are expected to be 23 000units.

a. Suppose that if Hyperion drops the price to $ 291 immediately, it can increase thisyear's sales by 28 % to 29 440 units. What would be the incremental impact on thisyear's EBIT of such a pricedrop?

b. Suppose that for each printersold, Hyperion expects additional sales of $ 71 per year on ink cartridges for the next threeyears, 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 a price drop thisyear?

a. Suppose that if Hyperion drops the price to $ 291immediately, it can increase thisyear's sales by 28 % to 29 440 units. What would be the incremental impact on thisyear's EBIT of such a pricedrop?

The change in EBIT will be $

nothing

b. Suppose that for each printersold, Hyperion expects additional sales of $ 71 per year on ink cartridges the next threeyears, 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 a price drop thisyear?

The change in EBIT from ink cartridge sales will be $

The incremental change in EBIT for the first year is $

The incremental change in EBIT for the second year is $

The incremental change in EBIT for the third year is $

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