A product development team at Polaroid Co. was in the midst of developing a new photographer printer, the CI-700. The relevant financial estimates for the CI-700 are obtained as follows:
Remaining development cost:				$5M
Market testing:				$1M
Ramp-up cost:				$2M
Introductory marketing:				$5M
Marketing and support				$1M/year
Unit production cost:				$400/unit
Sales and production				20,000 units/year
Unit price:				$800/unit
In order to complete the analysis, the financial estimates must be merged with timing information.
Year 1: Development, Market Testing, Ramp-up
Year 2: Introductory Marketing, Production and Sales
Year 3: Marketing and Support, Production and Sales
Year 4: Marketing and Support, Production and Sales

Q2. What is the net present value (NPV) of this project? Assume 10% discount rate.

Investment in Year 1

Net Present Value in Year 2

Net Present Value in Year 3

Net Present Value in Year 4

Total Net Present Value ($)

Q3. What is the net contribution in Year 1 ~Year 4 and the net present value (NPV) of the project if the sales estimates are as follows? Assume 15% discount rate

Year 2: 5,000 units

Year 3: 20,000 units

Year 4: 40,000 units