Arizona State University FIN FIN 40628 Glucose Scan Incorporated (GSI) currently sells its latest glucose…
Glucose Scan Incorporated (GSI) currently sells its latest glucose monitor, the Glucoscan 3000, to diabetic patients for $129. GSI plans on lowering their price next year to $99 per unit. The cost of goods sold for each Glucoscan unit is $50, and GSI expects to sell 100,000 units over the next year.
Suppose that if GSI drops the price on the Glucoscan 3000 immediately, it can increase sales over the next year by 30% to 130,000 units. The incremental impact of this price drop on the firms EBIT is closest to:
Group of answer choices
a decline of 2.4 million.
an increase of 1.5 million.
an increase of 2.4 million.
a decline of 1.5 million.
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