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What minimum price would you be willing to sell the software

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Reference no: EM13851448

Your R&D group has developed and tested a computer software package that assists engineers to control the proper chemical mix for the various process manufacturing industries. If you decide to market the software, your first-year operating net cash flow is estimated to be $1,000,000. Because of market competition, product life will be about 4 years, and the product"s market share will decrease by 25% each year over the previous year"s share.

You are approached by a big software house which wants to purchase the right to manufacture and distribute the product. Assuming that your interest rate is 15%, for what minimum price would you be willing to sell the software?

Reference no: EM13851448

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