A company specializes in the manufacture of braking systems. It is planning to introduce a new specially designed system for modern cars. The company is planning to begin the development of the system shortly and is in the process of determining the price of the system. It expects the following costs for their new product as shown in the Table:

Cost Information

	Year 1	Year 2	Year 3	Year 4
Units manufactured and sold	2, 000	15,000	20,000	5,000
R&D costs	1,900,000	100,000	-	-
Marketing costs	100,000	80,000	50,000	10,000
Production cost per unit	500	450	400	450
Customer service costs per unit	50	40	40	40
Disposal of specialist equipment	-	-	-	400,000

Marketing team believes that customers will be prepared to pay 500 for the new system but the financial team believes this will not cover all of the costs throughout the lifecycle.

1. Calculate the cost per unit looking at the whole lifecycle.
2. Briefly discuss how the calculated price (cost per unit) can impact the customer.
3. Suggest at least two strategies for the company to reduce the price if required.