Question

Hyperion​ Inc., currently sells its latest​ high-speed colour​ printer, the Hyper​ 500, for $363. Its cost of goods sold for the Hyper 500 is $207 per​ unit, and this​ year's sales​ (at the current price of $363​) are expected to be 25,000 units. Hyperion plans to lower the price of the Hyper 500 to $311 one year from now

.a. Suppose Hyperion considers dropping the price to $311 immediately, (rather than waiting one​ year). By doing so it expects to increase this​ year's sales by 26% to 31,500

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 $84 per year on ink cartridges for the​ three-year life of the​ printer, and Hyperion has a gross profit margin of 61%

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)?

a. Suppose Hyperion considers dropping the price to $311 immediately, (rather than waiting one​ year). By doing so it expects to increase this​ year's sales by 26% to 31,500

units. What would be the incremental impact on this​ year's EBIT of such a price​ drop?The change in EBIT will be $$$$$???(Round to the nearest​ dollar.)

b. Suppose that for each printer​ sold, Hyperion expects additional sales of $84 per year on ink cartridges for the​ three-year life of the​ printer, and Hyperion has a gross profit margin of 61%

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)? The change in EBIT from ink cartridge sales will be $??? (Round to the nearest​ dollar.)The incremental change in EBIT for the first year is $$$$$?(Round to the nearest​ dollar.)The incremental change in EBIT for the second year is $$$$$????(Round to the nearest​ dollar.)The incremental change in EBIT for the third year is $$$$$???? . (Round to the nearest​ dollar.)

Answer 1