For a new product, sales volume in the first year is estimated to be 100,000...
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Accounting
For a new product, sales volume in the first year is estimated to be 100,000 units and is projected to grow at a rate of 7% per year. The selling price is $10 and wil increase by $0.50 each year. Per-unit variable costs are $3, and annual fixed costs are $200,000. Per-unit costs are expected to increase 5% per year. Fixed costs are expected to increase 10% per year. Develop a spreadsheet model to calculate the net present value of profit over a 3-year period, assuming a 7% discount rate.
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