Reference no: EM132840759
You have just created the ultimate feature in driving: Jarvis. After you pull your car up to a curb, you say into your cell phone, "Jarvis, go park" and Jarvis will go find a parking space and park. When you come out, you can walk to the curb and say, "Jarvis, come pick me up" and the car will automatically drive to you.
No more having to walk in from Siberia after you park, no more having to waste time driving around up and down lanes, and your car comes to you.
The product is an app and software that can be downloaded into any car made 2010 or later. The cost to produce 1 unit is $5; the cost to operate the company is $10 million per year (salaries, lights, rent, etc).
The company has financial goals.
- The minimum profit is to be a 50% margin (revenue is double all costs)
- The company also wants to make back the $10 million it spent developing the software by year 2.
- By year 5, they want to hit $100 million in revenue.
- In the first year, they expect to get 5% of their TM. They expect sales volumes to double after that.
Question:
-What is the maximum price they should charge? Justify your number.