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create an NPV table (2) Scenario study Please check the uncertainty table below. The company needs to make a decision between two options: A-Reduce the

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(2) Scenario study Please check the uncertainty table below. The company needs to make a decision between two options: A-Reduce the initial sales volume to 100000, but also reduce the costs on market launch (8.0) B-Reduce the cost of product development (4.0), but increase the cost of marketing and support (6.0) Which one is better (according to the results at the end of Year 4)? 3 Uncertainty of Model Values Best Worst Model Values Base Model Inputs Sales Volume Growth, machines Initial Sales Velume, machines Initial Retail Price, machines Distributor Retail Margin Retail Price Growth, machines Product Development Equipment and Tooling Production Ramp-up Market Launch Marketing and Support -8 % 25% 15% 15% per year 200000 100000 250000 200000 unitslyear $225 $29 $260 $260 per unit 35% 5 % s0% 40% 40% 10 % 15 % 10% per year 4.0 3.0 1.5 5.0 7.0 5.0 SM over 1 year 40 5.0 4.0 SM over 1/2 year 2.5 20 20 SM over 1/2 year 8.0 15.0 10.0 10.0 SM over 1/2 year 4.0 6.0 5.0 5.0 SMlyear ss0 Production Cost, machines Production Overhead $55 per unit 12 0.8 1.0 1.0 SM/year (2) Scenario study Please check the uncertainty table below. The company needs to make a decision between two options: A-Reduce the initial sales volume to 100000, but also reduce the costs on market launch (8.0) B-Reduce the cost of product development (4.0), but increase the cost of marketing and support (6.0) Which one is better (according to the results at the end of Year 4)? 3 Uncertainty of Model Values Best Worst Model Values Base Model Inputs Sales Volume Growth, machines Initial Sales Velume, machines Initial Retail Price, machines Distributor Retail Margin Retail Price Growth, machines Product Development Equipment and Tooling Production Ramp-up Market Launch Marketing and Support -8 % 25% 15% 15% per year 200000 100000 250000 200000 unitslyear $225 $29 $260 $260 per unit 35% 5 % s0% 40% 40% 10 % 15 % 10% per year 4.0 3.0 1.5 5.0 7.0 5.0 SM over 1 year 40 5.0 4.0 SM over 1/2 year 2.5 20 20 SM over 1/2 year 8.0 15.0 10.0 10.0 SM over 1/2 year 4.0 6.0 5.0 5.0 SMlyear ss0 Production Cost, machines Production Overhead $55 per unit 12 0.8 1.0 1.0 SM/year

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