Hyperion, Inc., currently sells its latesthigh-speed colorprinter, the Hyper500, for

$359.

It plans to lower the price to

$293

next year. Its cost of goods sold for the Hyper 500 is

$202

perunit, and thisyear's sales(at the current price of

$359)

are expected to be

26,100

units.

a. Suppose that if Hyperion drops the price to

$293

immediately(rather than waiting oneyear), it can increase thisyear's sales by

23%

to

32,103

units. What would be the incremental impact on thisyear's EBIT of such a pricedrop?

b. Suppose that for each printersold, Hyperion expects additional sales of

$54

per year on ink cartridges for thethree-year life of theprinter, 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 such a pricedrop?

Question content area bottom

Part 1

a. Suppose that if Hyperion drops the price to

$293

immediately(rather than waiting oneyear) it can increase thisyear's sales by

23%

to

32,103

units. What would be the incremental impact on thisyear's EBIT of such a pricedrop?

The change in thisyear's EBIT is

$enter your response here.

(Round to the nearest dollar. Enter a decrease as a negativenumber.)