Professional Documents
Culture Documents
NPV $5,025,968
Calculations Area
Sales
Sales of new router $26,000,000 $26,000,000 $26,000,000 $26,000,000
Canibalized Sales $2,500,000 $2,500,000 $2,500,000 $2,500,000
Data
Year 0 1 2 3 4
Direct Effects
Unit Sales 100,000 100,000 100,000 100,000
Wholesale Price $260 $260 $260 $260
Design Costs $5,000,000
Production Cost $110 $110 $110 $110
Cost of Software Engineers $10,000,000
Cost of Lab Equipment $7,500,000
Depreciation % 0.2 0.2 0.2 0.2
Cost of Marketing and Support $2,800,000 $2,800,000 $2,800,000 $2,800,000
Tax Rate 0.4 0.4 0.4 0.4 0.4
Indirect Effects
Lost Rental $200,000 $200,000 $200,000 $200,000
Canibalization: % of Units 0.25 0.25 0.25 0.25
Canibalization: Sales Price $100 $100 $100 $100
Canibalization: Production Cost $60 $60 $60 $60
$0
$0
$0
$0
$0
$1,500,000
($1,500,000)
($600,000)
($900,000)
$1,500,000
$0
$2,100,000
$2,700,000
$0
$0
$0
$0
$0
$0
$0
$1,532,053
$1,532,053
0.2
0.4