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Your RSD group has developed and tested a computer software package that helps engineers control the proper chemical mix for various process-manufacturing industries. If you decide to market the software, your first-year operating net cash flow is estimated to be S1,200,000. Because of market competition, product life will be about four years, and the products market share will decrease by 25% each year over the previous year's share. 9 Click the icon to view the interest factors for discrete compounding when /= 15% per year. (a) To protect the erosion of the market share, you need to upgrade the software every year at the expense of $200,000. Is it worth upgrading the software? Your interest rate is 15%. The present worth of the project without upgrading is s thousand. (Round to the nearest whole number.) The present worth of the project with upgrading is S thousand. (Round to the nearest whole number.) Isit worth upgrading the software? Choose the correct answer below. O No O Yos (b) You are approached by a big software house which wants purchase the right to produce and distribute the software. For what minimum price would you be willing to sell the software? The minimum price of the software will be S thousand. (Round to the nearest whole number.)

Your RSD group has developed and tested a computer software package that helps engineers control the proper chemical mix for various process-manufacturing industries. If you decide to market the software, your first-year operating net cash flow is estimated to be S1,200,000. Because of market competition, product life will be about four years, and the products market share will decrease by 25% each year over the previous year's share. 9 Click the icon to view the interest factors for discrete compounding when /= 15% per year. (a) To protect the erosion of the market share, you need to upgrade the software every year at the expense of $200,000. Is it worth upgrading the software? Your interest rate is 15%. The present worth of the project without upgrading is s thousand. (Round to the nearest whole number.) The present worth of the project with upgrading is S thousand. (Round to the nearest whole number.) Isit worth upgrading the software? Choose the correct answer below. O No O Yos (b) You are approached by a big software house which wants purchase the right to produce and distribute the software. For what minimum price would you be willing to sell the software? The minimum price of the software will be S thousand. (Round to the nearest whole number.)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter1: Introduction And Goals Of The Firm
Section: Chapter Questions
Problem 2.2CE
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Your R&D group has developed and tested a computer software package that helps engineers control the proper chemical mix for various process-manufacturing industries. If you decide to market the software, your first-year operating net cash flow is estimated to be S1,200,000. Because of market competition, product life will be about four years, and the product's market share will decrease by 25% each year over the previous year's share. Click the icon to view the interest factors for discrete compounding when /= 15% per year. (a) To protect the erosion of the market share, you need to upgrade the software every year at the expense of $200,000. Isit worth upgrading the software? Your interest rate is 15%. The present worth of the project without upgrading is S thousand. (Round to the nearest whole number.) The present worth of the project with upgrading is S thousand. (Round to the nearest whole number.) Isit worth upgrading the software? Choose the correct answer below. O No O Yes (b) You are approached by a big software house which wants to purchase the right to produce and distribute the software. For what minimum price would you be willing to sell the software? The minimum price of the software will be S thousand. (Round to the nearest whole number.)
Transcribed Image Text:Your R&D group has developed and tested a computer software package that helps engineers control the proper chemical mix for various process-manufacturing industries. If you decide to market the software, your first-year operating net cash flow is estimated to be S1,200,000. Because of market competition, product life will be about four years, and the product's market share will decrease by 25% each year over the previous year's share. Click the icon to view the interest factors for discrete compounding when /= 15% per year. (a) To protect the erosion of the market share, you need to upgrade the software every year at the expense of $200,000. Isit worth upgrading the software? Your interest rate is 15%. The present worth of the project without upgrading is S thousand. (Round to the nearest whole number.) The present worth of the project with upgrading is S thousand. (Round to the nearest whole number.) Isit worth upgrading the software? Choose the correct answer below. O No O Yes (b) You are approached by a big software house which wants to purchase the right to produce and distribute the software. For what minimum price would you be willing to sell the software? The minimum price of the software will be S thousand. (Round to the nearest whole number.)
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