You developed a small device for grain producers. The IoT (Internet of Things) can monitor the moisture level in harvested grains and alert farmers for overheated grains. Each device can be sold for $100, while it cost you $50 to make.

You estimated that you can sell a decent number of devices in the next five years with some direct visits and marketing. The estimated cash flows are as the following.

It is estimated that you will need about $50, 000 to start manufacturing and get ready for sales.

You decide to conduct an economic analysis, and find out:

1) if you should take on the project if the MARR is 20%.

2) Analysis how the following factors will change the decision of whether you accept the project:

Initial investment - $50, 000

Unit Price - $100

Unit Cost - $50

Each factor will change between -25% to 25%.

3) Explain which factor has the most impact on project's profitability

4) Plan for the worst-case scenario from Step 2 and determine if a project should still be accepted?

Determine the breakeven unit price and unit cost.

0	1	2	3	4	5
Investment	$ (50,000)
Projected Sales		200	2,000	2,500	3,000	5,000
Sales		$ 20,000	$ 200,000	$ 250,000	$ 300,000	$ 500,000
Cost of Device		$ (10,000)	$ (100,000)	$ (125,000)	$ (150,000)	$ (250,000)
Cost of Sales		$ (10,000)	$ (40,000)	$ (60,000)	$ (60,000)	$ (70,000)
EBIT		$ -	$ 60,000	$ 65,000	$ 90,000	$ 180,000