Construct a simulation model to estimate the average profit

Assignment Help Financial Accounting
Reference no: EM133006225

Wearable Electronic Product Launch. 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.

Problem 1: 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.

Problem 2: What is your recommendation regarding whether to launch the product?

Reference no: EM133006225

Questions Cloud

Improve critical thinking skills : What are the methods you can use to improve your critical thinking skills?
Prepare the income statement budget : Just Soft Limited is a software consulting company. Prepare the income statement budget for 2021
Outline the classroom routine : Outline the classroom routine you observed each day during work placement.
Find an article of interest : There are numerous HR topics you can explore without becoming a member. Find an article of interest to you that focuses on an area of Human Resources you would
Construct a simulation model to estimate the average profit : 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.
Components support cross-functional collaboration : Note:What are the key components support cross-functional collaboration and teamworkWhat are the roles
How many months will it take for him to save : If, in addition to the initial investment, Brian saves $600 each month, how many months will it take for him to save $67,000
How a company can go broke : How a company can go broke if they purchase $20,000 of inventory in every three months, and then sell each batch over time bringing in $4,000/month
Importance of studying human behavior : Question: As a college student, what is the importance of studying Human Behavior?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd