Development and testing of the new app will take four months

Assignment Help Financial Management

Reference no: EM131009909

Take Five Systems, a new start-up, is developing a new iPhone application (“app”) and provides you with the following assumptions:

a. Development and testing of the new app will take four months. Month five is the first month of revenue generation.

b. Initial monthly app sales of 5,000 downloads at a price of $2.99

c. Unit sales will grow at 15% per month for months six through twelve and then will be flat thereafter

d. The app will become obsolete and will need to be revised/replaced after month 18 Use the data provided to forecast Take Five’s monthly revenue for Months 1-18

Reference no: EM131009909

Questions Cloud

What is the effective annual rate on this loan : You want to buy a new sports coupe for $79,500, and the finance office at the dealership has quoted you an APR of 5.8 percent for a 60-month loan to buy the car. What will your Monthly payments be? What is the effective annual rate on this loan?

What is the price of the bonds : Doisneau 22 year bonds have an annual coupon interest of 8%, make interest payments on a semiannual basis, and have a $1,000 par value. If the bonds are trading with a market’s required yield to maturity of 14%, are these premiums or discount bonds? ..

About the yield to maturity : (Yield to maturity) The market price is $1,175 for a 16-year bond ($1,000 par value) that pays 9% annual interest, but makes interest payments on a semiannual basis (4.5 % semiannually). What is the bond’s yield to maturity? (Round to 2 decimal place..

How many futures contracts would cover your risk : Suppose you are the treasurer of a large U.S. multinational firm that wants to hedge the foreign exchange risk associated with a payable of 1,000,000 Australian dollars due in 90 days. How many futures contracts would cover your risk? Assume that eac..

Development and testing of the new app will take four months : Take Five Systems, a new start-up, is developing a new iPhone application (“app”) and provides you with the following assumptions: Development and testing of the new app will take four months. Month five is the first month of revenue generation. Init..

What are the pros and cons of the alternative terms : You are developing a business plan for a new wholesale specialty goods retailer. You collect data on typical industry working capital terms. Using the alternative terms, compute the cash cycle and estimate the investment in working capital the busine..

Bond valuation : (Bond valuation) Pybus Inc. is considering issuing bonds that will mature in 23 years with an annual coupon rate of 9%. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get an AA rating on its bonds and, ..

The growth rate in dividend is expected : A common stock has just paid a dividend of $1.64/share. The dividend is expected to grow by 16% for the coming 25 years. After that, the growth rate in dividend is expected to be 5% per year in perpituity. The RRR on the stock is 10%. What is the val..

User Account

All Pages