Hyperion, Inc. currently sells its latest high-speed colour printer, the Hyper 500, for $341. It plans to lower the price to $292 next year. Its cost of goods sold for the Hyper 500 is $195 per unit, and this year's sales are expected to be 16,000 units.

a. Suppose that, if Hyperion drops the price to $292 immediately, it can increase this year's sales by 22% to 19,520 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 $65 per year on ink cartridges for the three years, 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 a price drop this year?