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Hyperion, Inc. currently sells its latest high-speed colour printer, the Hyper 500 , for $345. It plans to lower the price to $296 next year. Its cost of goods sold for the Hyper 500 is $197 per unit, and this year's sales are expected to be 24,000 units. a. Suppose that, if Hyperion drops the price to $296 immediately, it can increase this year's sales by 24% to 29,760 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 $79 per year on ink cartridges for the three years, and Hyperion has a gross profit margin of 65% on ink cartridges. What is the incremental impact on EBIT for the next three years of a price drop this year? a. Suppose that, if Hyperion drops the price to $296 immediately, it can increase this year's sales by 24% to 29,760 units. What would be the incremental impact on this year's EBIT of such a price drop? The change in EBIT will be \$ (Round to the nearest dollar.) Royal Mount Games would like to invest in a division to develop software for video games. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed the following estimates (in millions of dollars): (To copy the table below and use in Excel, click on icon in the upper right corner of table.) Assuming that Royal Mount currently does not have any working capital invested in this division, calculate the cash flows associated with changes in working capital for the first five years of this investment. (Enter increases as negative numbers since they are uses of cash.) The cash flow associated with the change in working capital for year 1 is $ million. (Round to the nearest integer.) Etobicoke Enterprises is deciding whether to expand its production facilities. Although long-term cash flows are difficult to estimate, management has projected the following cash flows for the first two years (in millions of dollars): a. What are the incremental earnings for this project for years 1 and 2? (Note: Assume any incremental cost of goods sold is included as part of operating expenses.) b. What are the free cash flows for this project for the first two years? a. Calculate the incremental earnings for Year 1 of this project below: (Round to one decimal place.) Buhler Industries is a farm implement manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight tractors. Buhler plans to use a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incomplete incremental free cash flow projections (in millions of dollars): Using the indirect method requires a separate calculation of the CCA tax shield. What is the present value of the CCA tax shield? The present value of the CCA tax shield is $ million. (Round to two decimal places.) Spherical Manufacturing recently spent $11 million to purchase some equipment used in the manufacture of disk drives. This equipment has a CCA rate of 25% and Spherical's marginal corporate tax rate is 34%. a. What are the annual CCA deductions associated with this equipment for the first five years? b. What are the annual CCA tax shields for the first five years? c. What is the present value of the first five CCA tax shields if the appropriate discount rate is 10% per year? d. What is the present value of all the CCA tax shields assuming the equiment is never sold and the appropriate discount rate is 10% per year? e. How might your answer to part (d) change if Spherical anticipates that its margina corporate tax rate will increase substantially over the next five years? a. What are the annual CCA deductions associated with this equipment for the first five years? The CCA deduction for year 1 is $ (Round to the nearest dollar.)