Question: 2. Howard Computers also makes webcams. Presently Howard only sells the Howard Basic Webcam but is considering adding a new webcam to augment its offering.

2. Howard Computers also makes webcams. Presently Howard only sells the

2. Howard Computers also makes webcams. Presently Howard only sells the Howard Basic Webcam but is considering adding a new webcam to augment its offering. The new product, the HD Enhanced Webcam, is an HD webcam with an enhanced camara and other features. The marketing groups has the following data: Product Basic Webcam HD Enhanced Webcam Price $45 $90 Variable Cost $25 $75 Unit Demand 30,000 15,000 As you might expect, the marketing people are concerned that sales of the HD Enhanced Webcam might cannibalize Basic Webcam sales. They estimate that 40% of the forecasted HD Enhanced Webcam demand will come directly from sales of Basic Webcam. The additional fixed cost associated with adding HD Enhanced Webcam is $25,000. 1. (45 points) Given this information, should Howard add HD Enhanced Webcam? Show all of your work and then justify in terms of incremental contribution why HD Enhanced Webcam should or should not be added. If the project goes forward, what is the final profit or loss expected

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