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Hyperion, Inc., currently sells its latest high-speed color printer, the Hyper 500 , for $346. It plans to lower the price to $301 next year.
Hyperion, Inc., currently sells its latest high-speed color printer, the Hyper 500 , for $346. It plans to lower the price to $301 next year. Its cost of goods sold for the Hyper 500 is $206 per unit, and this year's sales (at the current price of $346 ) are expected to be 29,100 units. a. Suppose that if Hyperion drops the price to $301 immediately (rather than waiting one year), it can increase this year's sales by 23% to 35,793 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 $61 per year on ink cartridges for the three-year life of the printer, and Hyerion has a gross profit margin of 65% on ink cartridges. What is the incremental impact on EBIT for the next three years of such a price drop
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