Question: Please show in Excel with excel formula You secure a team whos wants to help you develop, source, test,and launch the product. You spend the
Please show in Excel with excel formula
You secure a team whos wants to help you develop, source, test,and launch the product. You spend the next 2 years getting to launch by spending $35,000 in your first year and $40,000 in year 2 prior to launch
Your fore casted sales:
Year 1(post launch): 50units
Year 2: 150
Year 3: 200
Year 4: 250
Year 5: 250
- Your price point is $700 direct to Consumer, Amazon takes 16% of the Gross sale as a fee leaving you with a Net Sale of $588 per unit.
- Your on-going cost to run the business starting in the launch year is the following:
i.Year 1: 35% of Net Revenue
ii.Year 2 through 5: 30% of Net Revenue
- What COGS, and therefore net profit %, (to the nearest 10th of a $ and %) do you need to make this a positive NPV at 8% Cost of Capital (interest rate)?
- Terminology: Gross Sales is not Net Sales. In this example: Gross Revenue is $700 per unit. Net Revenue is $588 which is the $ you receive after selling on Amazon.
Remember: Cash Flow is NOT Revenue.
All calculations are based on end-of-year principle.
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