Hyperion, Inc. currently sells its latest high-speed colour printer, the Hyper 500, for $363. It plans to lower the price to $311 next year. Its cost of goods sold for the Hyper 500 is $207 per unit, and this year's sales are expected to be 18,000 units.

a. Suppose that, if Hyperion drops the price to $311 immediately, it can increase this year's sales by 26% to 22,680 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 $80 per year on ink cartridges for the three years, and Hyperion has a gross profit margin of 70% on ink cartridges. What is the incremental impact on EBIT for the next three years of a price drop this year?

The change in EBIT from ink cartridge sales will be

The incremental change in EBIT for the first year is

The incremental change in EBIT for the second year is

The incremental change in EBIT for the third year is