Daniels Consulting provides consulting services at an average price of $150 per hour and incurs variable costs of $75 per hour. Assume average fixed costs are $5,250 a month. Daniels has developed new software that will revolutionize billing for companies. Daniels has already invested $300,000 in the software. It can market the software as is at $40,000 per client and expects to sell to 12 clients. Daniels can develop the software further, adding integration to Microsoft products at an additional development cost of $150,000. The additional development will allow Daniels to sell the software for $49,000 each but to 15 clients.

Should Daniels sell the software as is or develop it further?

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As the Daniels has already invested 300000 in the software it is sunk cost and sunk co... View the full answer