Learning curves should be considered in their estimations

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The ABC Company is planning to produce seven tablet prototypes that will blow arch-rival Appintosh, Inc. out of its mind. The tablet prototypes will all be produced in a very similar fashion, so they anticipate that learning curves should be considered in their estimations. They estimate that total R&D will cost $1,400,000 and materials will total $1,200,000. They estimate that the first tablet prototype will take 50,000 labor hours and a 75 percent improvement curve is expected. Labor costs $150 per hour. Use the Learning Curve values from the tables in Appendix 5.1 of the textbook to respond to the following questions: a. Assuming you have no other information than is given in this problem, what price would you ask for the project? (Create a small table to show where your estimates come from). Do NOT make up any additional amounts – use only the data provided.

Reference no: EM131029788

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