Question
Please Show all cell calculations on excel and how it would look in the end. Appreciate the help! The management of Madeira Computing is considering
Please Show all cell calculations on excel and how it would look in the end. Appreciate the help!
The management of Madeira Computing is considering the introduction of a wearable electronic device with the functionality of a laptop computer and phone. The fixed cost to launch this new product is $300,000. The variable cost for the product is expected to be between $160 and $240, with a most likely value of $200 per unit. The product will sell for $300 per unit. Demand for the product is expected to range from 0 to approximately 20,000 units, with 4,000 units the most likely. LO 1, 2
A) Compute profit for this product in the base-case scenario.
B) Compute profit for this product in the worst-case scenario.
C) Compute profit for this product in the best-case scenario.
D) Model the variable cost as a uniform random variable with a minimum of $160 and a maximum of $240. Model the product demand as 1,000 times the value of a gamma random variable with an alpha parameter of 3 and a beta parameter of 2. Construct a simulation model to estimate the average profit and the probability that the project will result in a loss.
E) What is your recommendation regarding whether to launch the product?
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