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with process please Apple has been selling 52, 500 iMacs per year at a price of $3,700 and an operating margin of 72% (i.e. what
with process please
Apple has been selling 52, 500 iMacs per year at a price of $3,700 and an operating margin of 72% (i.e. what fraction of revenue is left after deducting COGS and depreciation) for years and expects to continue doing so. Next year, Apple will introduce the new model replacing the current model completely. The price will be 8% lower, increasing sales by 7, 100 units and lowering operating margin to 57% for all future years. What is the incremental impact on EBIT from year 1 onwards that is due to this price change (in million)? $ m Apple designed the new model in such a way that customers who buy the new model in one year can be expected to contribute $273 in extra EBIT in the form of software and hardware upgrades per unit for each of the 3 subsequent years. The old model effected no such add-on purchases. What will be the effect on year 2 EBIT that is due to the add-on sales alone? Im Under these additional assumptions, enter the combined incremental changes to overall EBIT in years 2, 3 and 4 below. The incremental change in EBIT in year 2 is $ Im The incremental change in EBIT in year 3 is $ m The incremental change in EBIT in year 4 is $ ImStep by Step Solution
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