1. We have to get this new product and fast, said the Operations Director. Our competitors are

close behind us and I believe their products will be almost as good as ours when they launch

them. She was talking about a new product that the company hoped would establish them as

the leader in the market. The company had put together a special development team together

with their own development laboratory. They had spent 10,000 on equipping the laboratory

and the cost of the development engineers would be 20,000 per quarter. It was expected that

the new product would be fully developed and ready for launch within six quarters. It would be

so through a specialist agency that charged 10,000 per quarter and would need to be in place

two quarters prior to the launch. If the company met their launch date it was expected that they

could charge a premium price that would result in profits of approximately 50,000 per quarter.

Any delay in the launch would result in profits being reduced to 40,000 per quarter. If this

development project were delayed by two quarters how far would the break-even point for the

project be pushed back?