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(b Hyperion Inc., currently sells its latest high-speed colour printer, the Hyper 500, for $359. Its cost of goods sold for t
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Answer #1

a) EBIT before reduction of price = (359 - 205)*16000 = $24,64,000

  EBIT after reduction of price = (308 - 205)*20320 = $20,92,960

Hence change in EBIT will be = 2092960 - 2464000 = $ -3,71,040

b) EBIT from ink catridge sales = Sales price*GP Margin*Quantity

= $84*.66*20,320 = $1126540

Increemental change in first year = $84*.66*(20,320-16000) = $239501

Increemental change in second year = NIL (because quantity sold after one year will remain same)

Increemental change in Third year = NIL (because quantity sold after one year will remain same)

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