gating and Men and estimate Ultimate Business Software Led has been trading for a low jeans which has a software company, developing high piality soledate products for industrial application, flows are is in line It has several packages which have long lives Consumer pay an the projen annual service charge, which covers upgrade and imaintenance The company now wishes to introduce new software in the areas of to prevent Inventory movement (MJ, to be marted in 2017 projects may .distribution logistics (DL), to be started in 2018 der to get a quality measurement (OM), In her wanted in 2019. -investment It is thought that nach new software package will have a life of three years, after which they will have to be redesigned and relaunched. or product Because of the work involved in designing and marketing the package they will be introduced over three years. tine enues may be The following estimates have been made for these packages e on this, see Package IM DL OM this guide. Year 1 Year 2 Year Year 1 Year 2 Year 3 Year 1 Year 2 Your I Estimated demand Cunitil 7400 10,000 er 13, Selling price E1 800 1 1.GOO 43.000 12.500 12 500 12.700 Costs EDDO LOOD Research and product d activities, design 2,400 Production 1. 300 1:500 of capital 1.200 100 t on the results Distribution 150 240 thods Customer call out and 500 1,750 150 2.20 support 450 For product OM, in an effort to reduce costs, the research and product o a product design was kept to a minimum, Present the product lifecycle income statement for each software package on a year-by year basis and in total. Calculate the impact of the new packages on the company's income for years 2017-21 and briefly comment on the profit trends, hat the two Comment on the profitability and differences in cost structure of the three products and adving the company on strategies for Improved fear 3 profitability it has the higher Us pricing and Ion, ethics and bility and12.12 Sample examination questions 1. Consider the following two projects, A and B. Assume that the two projects carry the same risk. U Year 0 Year 1 Year 2 Year 3 -100 -100 Explain, without making any calculations, which project has the higher net present value. 2. a. Compare the advantages and limitations of cost-plus pricing and lifecycle pricing. Refer in your answer to competition, ethics and consumer behaviour. b. Discuss the link between corporate social responsibility and lifecycle cost