Please read the following information before answering Question 1 and Question 2 in Part B. Anca works with the mechanical equipment development branch of Atomic Energy Canada in Chalk River. She is now getting ready to introduce a product which, because of its quality, might be considered to be an innovation. Ten years ago, a new technology was developed to deal with remote viewing of operations in hazardous environments. The idea, originally, was to assist operators performing remote repairs in nuclear environments. Today, however, it is viewed as a technology that would help in other industries that have environments that could be hazardous to workers such as petrochemical, underwater, military, bomb disposal, and airport security. Although three companies have introduced products that use this technology, the quality is rather poor. AEC has been working on this product for ten years and is finally satisfied that it has a superior product, with excellent quality, but somewhat more expensive than those offered by competitors. The technology is a 3-dimensional stereographic vision system consisting of two standard T.V. cameras mounted in one-housing. Image signals from each camera are transmitted to corresponding T.V. monitors. By using polarizing filters in front of each monitor with matching filters on spectacles worn by the operator, the perception of three dimensions can be developed by the system. Effectively, this gives the operator the ability to view what is going on in three dimensions as if one was actually there. If, for example, one wants to remove a bolt from an object, one can actually see it and work on it as if one was really there. There are three key competitors who have already introduced similar products. Phillips has a product which sells for approximately $50,000; Metron's product is priced at $20,000 and Toshiba's at $6,000. (The latter us viewed by many experts as a "toy".) The product that Anca wants to sell at $100,000, was developed jointly by A.E.C. and the United Kingdom Atomic Energy Authority (U.K.A.E.A.) at Harwell. The picture quality of this system is much better than that of the competitors. In fact, whereas the competitor's picture quality is considered to be very poor, the new products quality is judged to be outstanding. In doing a quick analysis, Anca realizes that there are approximately 300 potential buyers in North America. Most importantly, she realizes that there are the 30 nuclear utilities in North America; six of which are which are involved in R\&D. These include Ontario Hydro, and Duke Power. Aside from the utilities, there are 170 other nuclear related organizations. These potential customers would not be expected to take advantage of the new product until after they have had a chance to "observe" it in "action" at the utilities. This group include 50 nuclear sites, 80 service groups to the nuclear industry and 40 inspection groups. There are also approximately 100 non-nuclear related potential customers. These include organizations that work in petrochemicals, underwater, military and bomb disposal facilities. This is a small but high growth market Read the following paragraphs and then answer the questions which follow. Anca works with the mechanical equipment development branch of Atomic Energy Canada in Chalk River. She is now getting ready to introduce a product which, because of its quality, might be considered to be an innovation. Ten years ago, a new technology was developed to deal with remote viewing of operations in hazardous environments. The idea, originally, was to assist operators performing remote repairs in nuclear environments. Today, however, it is viewed as a technology that would help in other industries that have environments that could be hazardous to workers such as petrochemical, underwater, military, bomb disposal, and airport security. Although three companies have introduced products that use this technology, the quality is rather poor. AEC has been working on this product for ten years and is finally satisfied that it has a superior product, with excellent quality, but somewhat more expensive than those offered by competitors. The technology is a 3-dimensional stereographic vision system consisting of two standard T.V. cameras mounted in one-housing. Image signals from each camera are transmitted to corresponding T.V. monitors. By using polarizing filters in front of each monitor with matching filters on spectacles worn by the operator, the perception of three dimensions can be developed by the system. Effectively, this gives the operator the ability to view what is going on in three dimensions as if one was actually there. If, for example, one wants to remove a bolt from an object, one can actually see it and work on it as if one was really there. There are three key competitors who have already introduced similar products. Phillips has a product which sells for approximately $50,000; Metron's product is priced at $20,000 and Toshiba's at $6,000. (The latter us viewed by many experts as a "toy".) The product that Anca wants to sell at $100,000, was developed jointly by A.E.C. and the United Kingdom Atomic Energy Authority (U.K.A.E.A.) at Harwell. The picture quality of this system is much better than that of the competitors. In fact, whereas the competitor's picture quality is considered to be very poor, the new products quality is judged to be outstanding. In doing a quick analysis, Anca realizes that there are approximately 300 potential buyers in North America. Most importantly, she realizes that there are the 30 nuclear utilities in North America; six of which are which are involved in R\&D. These include Ontario Hydro, and Duke Power. Aside from the utilities, there are 170 other nuclear related organizations. These potential customers would not be expected to take advantage of the new product until after they have had a chance to "observe" it in "action" at the utilities. This group include 50 nuclear sites, 80 service groups to the nuclear industry and 40 inspection groups. There are also approximately 100 non-nuclear related potential customers. These include organizations that work in petrochemicals, underwater, military and bomb disposal facilities. This is a small but high growth market Assume the following: -Materials to manufacture each 3D vision system costs $12,000. -Anca's entire salary will be charged to the project. Her present salary is $70,000 per year but she can expect to get a raise of $5,000 per year (i.e. year 1$70,000, year 2 $75,000, etc.) -The facilities used (space, secretarial help, etc.) will be charged to the project at the rate of $25,000 per year. -A royalty of 5% will be paid to U.K.A.E.A. at Harwell on all sales. - Research and development costs until now have cost $500,000. -Materials to manufacture each 3D vision system costs $12,000. -Anca's entire salary will be charged to the project. Her present salary is $70,000 per year but she can expect to get a raise of $5,000 per year (i.e. year I - $70,000, year 2 - $75,000, etc.) -The facilities used (space, secretarial help, etc.) will be charged to the project at the rate of $25,000 per year. -A royalty of 5% will be paid to U.K.A.E.A. at Harwell on all sales. -Research and development costs until now have cost $500,000. Management wants to recover all costs and earn a minimum of $1,000,000 over the next five years. How many 3D vision systems must be sold during the next five years, if management is to achieve its objective? In determining prices and profits (as discussed in class), existing businesses are better off only looking at "contribution to margins and profits." Please explain - BRIEFLY (In 50 words or less) Please read the following information before answering Question 1 and Question 2 in Part B. Anca works with the mechanical equipment development branch of Atomic Energy Canada in Chalk River. She is now getting ready to introduce a product which, because of its quality, might be considered to be an innovation. Ten years ago, a new technology was developed to deal with remote viewing of operations in hazardous environments. The idea, originally, was to assist operators performing remote repairs in nuclear environments. Today, however, it is viewed as a technology that would help in other industries that have environments that could be hazardous to workers such as petrochemical, underwater, military, bomb disposal, and airport security. Although three companies have introduced products that use this technology, the quality is rather poor. AEC has been working on this product for ten years and is finally satisfied that it has a superior product, with excellent quality, but somewhat more expensive than those offered by competitors. The technology is a 3-dimensional stereographic vision system consisting of two standard T.V. cameras mounted in one-housing. Image signals from each camera are transmitted to corresponding T.V. monitors. By using polarizing filters in front of each monitor with matching filters on spectacles worn by the operator, the perception of three dimensions can be developed by the system. Effectively, this gives the operator the ability to view what is going on in three dimensions as if one was actually there. If, for example, one wants to remove a bolt from an object, one can actually see it and work on it as if one was really there. There are three key competitors who have already introduced similar products. Phillips has a product which sells for approximately $50,000; Metron's product is priced at $20,000 and Toshiba's at $6,000. (The latter us viewed by many experts as a "toy".) The product that Anca wants to sell at $100,000, was developed jointly by A.E.C. and the United Kingdom Atomic Energy Authority (U.K.A.E.A.) at Harwell. The picture quality of this system is much better than that of the competitors. In fact, whereas the competitor's picture quality is considered to be very poor, the new products quality is judged to be outstanding. In doing a quick analysis, Anca realizes that there are approximately 300 potential buyers in North America. Most importantly, she realizes that there are the 30 nuclear utilities in North America; six of which are which are involved in R\&D. These include Ontario Hydro, and Duke Power. Aside from the utilities, there are 170 other nuclear related organizations. These potential customers would not be expected to take advantage of the new product until after they have had a chance to "observe" it in "action" at the utilities. This group include 50 nuclear sites, 80 service groups to the nuclear industry and 40 inspection groups. There are also approximately 100 non-nuclear related potential customers. These include organizations that work in petrochemicals, underwater, military and bomb disposal facilities. This is a small but high growth market Read the following paragraphs and then answer the questions which follow. Anca works with the mechanical equipment development branch of Atomic Energy Canada in Chalk River. She is now getting ready to introduce a product which, because of its quality, might be considered to be an innovation. Ten years ago, a new technology was developed to deal with remote viewing of operations in hazardous environments. The idea, originally, was to assist operators performing remote repairs in nuclear environments. Today, however, it is viewed as a technology that would help in other industries that have environments that could be hazardous to workers such as petrochemical, underwater, military, bomb disposal, and airport security. Although three companies have introduced products that use this technology, the quality is rather poor. AEC has been working on this product for ten years and is finally satisfied that it has a superior product, with excellent quality, but somewhat more expensive than those offered by competitors. The technology is a 3-dimensional stereographic vision system consisting of two standard T.V. cameras mounted in one-housing. Image signals from each camera are transmitted to corresponding T.V. monitors. By using polarizing filters in front of each monitor with matching filters on spectacles worn by the operator, the perception of three dimensions can be developed by the system. Effectively, this gives the operator the ability to view what is going on in three dimensions as if one was actually there. If, for example, one wants to remove a bolt from an object, one can actually see it and work on it as if one was really there. There are three key competitors who have already introduced similar products. Phillips has a product which sells for approximately $50,000; Metron's product is priced at $20,000 and Toshiba's at $6,000. (The latter us viewed by many experts as a "toy".) The product that Anca wants to sell at $100,000, was developed jointly by A.E.C. and the United Kingdom Atomic Energy Authority (U.K.A.E.A.) at Harwell. The picture quality of this system is much better than that of the competitors. In fact, whereas the competitor's picture quality is considered to be very poor, the new products quality is judged to be outstanding. In doing a quick analysis, Anca realizes that there are approximately 300 potential buyers in North America. Most importantly, she realizes that there are the 30 nuclear utilities in North America; six of which are which are involved in R\&D. These include Ontario Hydro, and Duke Power. Aside from the utilities, there are 170 other nuclear related organizations. These potential customers would not be expected to take advantage of the new product until after they have had a chance to "observe" it in "action" at the utilities. This group include 50 nuclear sites, 80 service groups to the nuclear industry and 40 inspection groups. There are also approximately 100 non-nuclear related potential customers. These include organizations that work in petrochemicals, underwater, military and bomb disposal facilities. This is a small but high growth market Assume the following: -Materials to manufacture each 3D vision system costs $12,000. -Anca's entire salary will be charged to the project. Her present salary is $70,000 per year but she can expect to get a raise of $5,000 per year (i.e. year 1$70,000, year 2 $75,000, etc.) -The facilities used (space, secretarial help, etc.) will be charged to the project at the rate of $25,000 per year. -A royalty of 5% will be paid to U.K.A.E.A. at Harwell on all sales. - Research and development costs until now have cost $500,000. -Materials to manufacture each 3D vision system costs $12,000. -Anca's entire salary will be charged to the project. Her present salary is $70,000 per year but she can expect to get a raise of $5,000 per year (i.e. year I - $70,000, year 2 - $75,000, etc.) -The facilities used (space, secretarial help, etc.) will be charged to the project at the rate of $25,000 per year. -A royalty of 5% will be paid to U.K.A.E.A. at Harwell on all sales. -Research and development costs until now have cost $500,000. Management wants to recover all costs and earn a minimum of $1,000,000 over the next five years. How many 3D vision systems must be sold during the next five years, if management is to achieve its objective? In determining prices and profits (as discussed in class), existing businesses are better off only looking at "contribution to margins and profits." Please explain - BRIEFLY (In 50 words or less)