Tomas Jone is the investment manager at the High Moon Feet which is a famous company specialist in sport shoes and other sport equipments in Western Asia. Jone needs your help to support his decision regarding the company investments. The strategic assumptions regarding the company project necessitate the development of two planning models. The first one is a tentative plan for years (2016-2020) which will be used to estimate the price and the fixed cost. The second plan (years from 2021 to 2025) will be the actual model which will help the manager to take a decision.

1. The following are some assumptions provided by the manager to help you in developing the tentative model:
   1. At price $30, demand was 1600 units. With each $1 increase in the price, 8 units will be decreased from the company demand.
   2. The following

UNIT	COST
500	7000
800	32500
1000	36700
1200	41000
2000	43280

3. The unit selling price is $70 and is expected to grow at 12% per year
4. Fixed cost is $2300 and is expected to be grow at 15% per year

Having developed the above model, now its the time to pass some of the results to your actual model.

2. Use the above model to calculate the staring selling price. The selling price is the average of the price of the five years when the company reached the break-even point in the years (2016-2017) while get a total profit of $150,000 in the years (2018-2020)

3. The manager found that there is a strong relationship between the growth rate of the fixed cost and the growth rate of the selling price. At a fixed cost growth rate of 8%, the growth rate of selling price was 10%. With each increase by 1% in the growth rate of the fixed cost, the growth rate of the selling price increases by 2%. The manager estimates the growth rate of the fixed cost to be 18%. The fixed cost of the first year is estimated to be $2450.
4. After identify information of price and fixed cost develop an Excel model that computes profits over the next five years and then discounts those profits back to todays dollars by using the following discount rates: 4%, 8%, 12%, and 16%.