CamLife Ltd manufactures webcams, devices which can provide live video and audio streams via personal computers. You report to the senior financial manager, but you also regularly advise the marketing department on pricing matters.

You receive the following email from CamLife's Marketing Director:

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From: Marketing Director To: Date: Management Accountant XXXXXX Subject: Pricing Strategies As you know, we in CamLife have recently been suffering from liquidity problems. We, in the Marketing Depart- ment, hope that these will be eased by the launch of our new webcam, which has revolutionary audio sound and visual quality. The webcam is expected to have a product life cycle of two years. Market research has already been carried out to establish a target selling price and projected lifetime sales volumes for the product. Cost estimates have also been prepared, based on the current proposed product specification.