You are preparing a sales forecast for NewCo Inc. The company has a prototype of its product and believes sales will begin 12 months from today. In this question, you will prepare a sales forecast for this business for the next 5 years using a Bass Diffusion Model.

The following facts relate to this plan:

First sale in 12 months, implying THIS years sales will be zero

The total market size is 100 million potential customers

In first year of sales, the company believes adoption will be .05% of the market or 50,000 customers

Study of the product and the potential customers has led to estimates for p + q = .5

Each new customer will purchase the product only once during the five-year forecast period

Each product will sell for $155 each