Being "early to market" with a new product often results in grabbing relatively high levels of market share. A newly designed wireless, noise canceling, high fidelity, specialty headphone with microphone is released for use in noisy control room settings. Pre-release Beta test reviews were excellent. Development costs, adjusted to time 0, are $3,000,000. Quarterly incomes begin at $750,000 at the end of Q1 and ramp up to $1,200,000, $1,500,000, and $2,250,000 over the next three quarters. Then, they begin to drop by $225,000 per quarter for the next two years. Choose a quarter-by-quarter cash flow diagram covering financial results over three years. A $2,250K B $2,250K $1,500K+ $1,500K+ $1,575 $1,200K $900K 8 9 10 11 12 End of Quarter (-) $450K $3,000K C $3,000K $2,925 0 1 2 3 4 5 6 7 8 9 10 11 12 End of Quarter $750K $900K $1,200K $1,575K (-) $750K $1,500K $2,250K D $1,200K $750K (-) $3,000K $2,250K $1,500K all $1,200K (+) $750K (-) $3,000K

Being "early to market" with a new product often results in grabbing relatively high levels of market share. A newly designed wireless, noise canceling, high fidelity, specialty headphone with microphone is released for use in noisy control room settings. Pre-release Beta test reviews were excellent. Development costs, adjusted to time 0, are $3,000,000. Quarterly incomes begin at $750,000 at the end of Q1 and ramp up to $1,200,000, $1,500,000, and $2,250,000 over the next three quarters. Then, they begin to drop by $225,000 per quarter for the next two years. Choose a quarter-by-quarter cash flow diagram covering financial results over three years. A $2,250K B $2,250K $1,500K+ $1,500K+ $1,575 $1,200K $900K 8 9 10 11 12 End of Quarter (-) $450K $3,000K C $3,000K $2,925 0 1 2 3 4 5 6 7 8 9 10 11 12 End of Quarter $750K $900K $1,200K $1,575K (-) $750K $1,500K $2,250K D $1,200K $750K (-) $3,000K $2,250K $1,500K all $1,200K (+) $750K (-) $3,000K

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 16PB: At Stardust Gems, a faux gem and jewelry company, the setting department is a bottleneck. The...

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