Hi Tutor,

The excercise is as follows:

1.Build a quantitative model to analyze the development and sale of a bicycle light. Assume that production ramp-up expenses would be $20,000, ongoing marketing and support costs would be $2,000 per month, and development would take 12 months.Assume that you could sell 20,000 units per year for five years after development at a sales price (wholesale) of $20 per unit and a manufacturing cost of $10 per unit.How much development spending could justify such a projectif you use 6% annual interest rate?

The solution is that:

"Results: NPV = -0.97805x+656326.86

How do you figure out 656326.86and and 0.97805?

Thanks & regards