Apple World Inc. develops apps for sporting enthusiasts. They have decided to create a new app for golfers that they are calling Slice. The total life cycle of Slice is expected to be three years, with the design phase taking the first year. Following are the estimated costs for the three years:

		Fixed Costs	Variable costs per unit
Year 1	R&D Costs	$ 225,000
	Design Costs	175,000
Year 2-3	Production		$0.25 per app
	Marketing		$0.10 per app
	Customer Service	360,000
	Total fixed costs	$760,000

The management team is considering two pricing strategies:

1. Sell the app for $1.00. At this price, they expect to sell 1,500,000 apps per year.

2. Sell the app in year two when it first comes out at $1.50; expected demand is 1,000,000. Then, reduce the price in year three to $0.50; demand is expected to be 3,500,000.

Create a report answering the question below. Your answer should include schedules created in Excel. Remember Excel schedules should be created to easily be changed in what-if scenarios

What pricing strategy is more profitable over the product's life cycle?

Note: Use data table to get the answer.