Hyperion Inc., currently sells its latest high-speed color printer, the Hyper 500, for $357. It plans...
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Hyperion Inc., currently sells its latest high-speed color printer, the Hyper 500, for $357. It plans to lower the price to $302 next year. Its cost of goods sold for the Hyper 500 is $204 per unit, and this year's sales (at the current price of $357) are expected to be 21,600 units. a. Suppose that if Hyperion drops the price to $302 immediately (rather than waiting one year) it can increase this year's sales by 21% to 26,136 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 $56 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 84% on ink cartridges. What is the incremental impact on EBIT for the next three years of such a price drop? a. Suppose that if Hyperion drops the price to $302 immediately (rather than waiting one year) it can increase this year's sales by 21% to 26,136 units. What would be the incremental impact on this year's EBIT of such a price drop? The change in this year's EBIT is $. (Round to the nearest dollar. Enter a decrease as a negative number.) Hyperion Inc., currently sells its latest high-speed color printer, the Hyper 500, for $357. It plans to lower the price to $302 next year. Its cost of goods sold for the Hyper 500 is $204 per unit, and this year's sales (at the current price of $357) are expected to be 21,600 units. a. Suppose that if Hyperion drops the price to $302 immediately (rather than waiting one year) it can increase this year's sales by 21% to 26,136 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 $56 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 84% on ink cartridges. What is the incremental impact on EBIT for the next three years of such a price drop? a. Suppose that if Hyperion drops the price to $302 immediately (rather than waiting one year) it can increase this year's sales by 21% to 26,136 units. What would be the incremental impact on this year's EBIT of such a price drop? The change in this year's EBIT is $. (Round to the nearest dollar. Enter a decrease as a negative number.)
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Current sales at 357 price 21600 units Revenue at current price 21600 357 7703200 Cost of goods sold ... View the full answer
Related Book For
Corporate Finance The Core
ISBN: 9781292158334
4th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
Posted Date:
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