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Hyperion , Inc. currently sells its latest high - speed colour printer , the Hyper 5 0 0 , for $ 3 7 3 .

Hyperion, Inc. currently sells its latesthigh-speed colourprinter, the Hyper500, for $373. It plans to lower the price to $320 next year. Its cost of goods sold for the Hyper 500 is $213 perunit, and thisyear's sales are expected to be 15,000 units.
a. Supposethat, if Hyperion drops the price to $320immediately, it can increase thisyear's sales by 21% to 18,150 units. What would be the incremental impact on thisyear's EBIT of such a pricedrop?
b. Supposethat, for each printersold, Hyperion expects additional sales of $81 per year on ink cartridges for the threeyears, and Hyperion has a gross profit margin of 64% on ink cartridges.
What is the incremental impact on EBIT for the next three years of a price drop thisyear?

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