NCIAL ASPECTS OF MARKETING MANAGEMENT w Model LX4 is estimated to be 300 units per year. Sixty The demand for the ne percent of these unit sales of the new model is expected to come from other models already being manufactured by VCI 0 30 percent from Model LX2, and 60 percent from Model LX3). VCI will incur a fixed cost or s20,000 to add the new model to the line. Based on the preceding data, should VCrasa the new Model LX4 to its line of VCRs? Why? percent from Model LX 6. Max Leonard, vice president of Marketing for Dysk Computer, Inc., must decide whether to introduce a midpriced version of the firm's DC6900 per- sonal computer product line-the DC6900-X. The DC6900-X would sell for $3,900, with unit variable costs of $1,800. Projections made by an indepen- dent marketing research firm indicate that the DC6900-X would achieve a sales volume of 500,000 units next year, in its first year of commercialization One-half of the first year's volume would come from competitors' personal computers and market growth. However, a consumer research study indicates that 30 percent of the DC6900-X sales volume would come from the higher- priced DC6900-Omega personal computer, which sells for $5,900 (with unit variable costs of $2,200). Another 20 percent of the DC6900-X sales volume would come from the economy-priced DC6900-Alpha personal computer priced at $2,500 (with unit variable costs of $1,200). The DC6900-Omega unit volume is expected to be 400,000 units next year, and the DC6900-Alpha is expected to achieve a 600,000-unit sales level. The fixed costs of launching the DC6900-X have been forecast to be $2 million during the first year of com mercialization. Should Mr. Leonard add the DC6900-X model to the line of personal computers? Why? A sports nutrition company is examining whether a new high-performance sports drink should be added to its product line. A preliminary feasibility analysis indicated that the company would need to invest $17.5 million in new manufacturing facility to produce and package the product. A financial analysis using sales and cost data supplied by marketing and production per sonnel indicated that the net cash flow (cash inflows minus cash outflo would be $6.1 million in the first year of commercialization, $7.4 million in year 2, $7.0 million in year 3, and $5.5 million in year 4 Senior company executives were undecided whether to move forward ith the development of the new product. They requested that a discounted cash flow analysis be performed using two different discount rates: 20 percent and 15 percent Should the company proceed with develop f the product if a