Evaluate the present value of the introduction of new chip

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Reference no: EM131070687

Quick Computing currently sells 9 million computer chips each year at a price of $11 per chip. It is about to introduce a new chip, and it forecasts annual sales of 27 million of these improved chips at a price of $14 each. However, demand for the old chip will decrease, and sales of the old chip are expected to fall to 2 million per year. The old chip costs $6 each to manufacture, and the new ones will cost $10 each. What is the proper cash flow to use to evaluate the present value of the introduction of the new chip?

Reference no: EM131070687

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