Hycinth Inc., currently sells its latest high-speed colour printer, the Hyper 500, for $ 349. Its cost of goods sold for the Hyper 500 is $ 192 per unit, and this year's sales (at the current price of $ 349) are expected to be 26,100 units. Hycinth plans to lower the price of the Hyper 500 to $ 300 one year from now. Suppose Hycinth considers dropping the price to $ 300 immediately, (rather than waiting one year). By doing so it expects to increase this year's sales by 30 % to 33,930 units. The incremental impact on this year's EBIT of such a price drop would be a cash outflow to the amount of $ Hint: Find the change in EBIT?

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08-06-2024
Business

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Hycinth Inc., currently sells its latest high-speed colour printer, the Hyper 500, for $ 349. Its cost of goods sold for the Hyper 500 is $ 192 per unit, and this year's sales (at the current price of $ 349) are expected to be 26,100 units. Hycinth plans to lower the price of the Hyper 500 to $ 300 one year from now. Suppose Hycinth considers dropping the price to $ 300 immediately, (rather than waiting one year). By doing so it expects to increase this year's sales by 30 % to 33,930 units. The incremental impact on this year's EBIT of such a price drop would be a cash outflow to the amount of $ Hint: Find the change in EBIT?

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