Paulo Sanchez feels that there is a market niche for software that helps entrepreneurs file for a patent. Surveying the features and prices of legal forms already in the market, the Paulo believes that a price of $150 would be about right for such software. At that price, he estimates that 1,000 copies could be sold each year. To design, develop, produce and service this software, an investment of $400,000 would be required. Paulo desires a 15% return on his investment (ROI).
Given these data, the target cost to create, sell, and service the software is:
Q U ES TI O N 2
(Not a repeat question.) The New Product Development Team at Mattel Inc. has developed a new version of the …show more content…
Decrease profit by 25%
Leave the ROS unchanged
Decrease their ROS by 25%
Double their ROS
Cannot be determined as we do not have the expense numbers
Q U ES TI O N 6
Hightech manufactures color printers. The are in the process of planning the production and design of Model CX-700, one of their popular selling models. The breakdown of the cost for producing Model CX-700, and the value index computed for this last period, are provided.
(For simplicity assume there are only three components.) The first component is the ink cartridge, which costs $45 and determines color quality. The second is the color sensor, cost of $35; it matches screen color to printed color. The final component is a paper sensor, which costs $20 and lights up when the machine is out of paper. The customers want sharper colors, a better correspondence between what see on screen and what they print on paper, and a sensor that can be connected to the PC speaker to issue an audio out of paper warning. The additional spending required to provide these features and the value index for these three components is as follows: Ink cartridge, additional spending of $27 has a value index of .80;
Color sensor costs $18 more and has a value index of 1.543; and finally the Paper sensor which costs $5 more and has a value index of.500. The company feels that if they were to