A software company is considering translating its program into French. Each unit of the program sells for

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A software company is considering translating its program into French. Each unit of the program sells for $50 and incurs a variable cost of $10 to produce. Currently, the size of the market for the product is 300,000 units per year, and the English version of the software has a 30% share of the market. The company estimates that the market size will grow by 10% a year for the next five years, and at 5% per year after that. It will cost the company $6 million to create a French version of the program. The translation will increase its market share to 40%. Given a 10-year planning horizon, for what discount rates is it profitable to create the French version of the software?

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Practical Management Science

ISBN: 978-1305250901

5th edition

Authors: Wayne L. Winston, Christian Albright

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