Hyperion, Inc., currently sells its latest high-speed color printer, the Hyper 500, for $360. It plans to lower the price to $301 next year. Its cost of goods sold for the Hyper 500 is $200 per unit, and this year's sales (at the current price of $360) are expected to be 25,600 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 28% to 32,768 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 $50 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 75% on ink cartridges. What is the incremental impact on EBIT for the next three years of such a pricedrop?