Task 1

A tech startup is considering developing a new software product. The projected costs and revenues are as follows: Research and development: $75,000; Manpower (salaries, etc.): $60,000; Equipment (computers, licenses, etc.): $54,000; Marketing Costs: $12,000; Operational Expenses (utilities, etc.): $8,900 The startup projects the following revenues from the software product over the next year: Software sales: $205,000; Service & maintenance contracts: $5,700. Alternatively, the startup could decide to reduce costs by cutting down on marketing and equipment costs, and they manage to increase software sales. The new figures are: Marketing costs: $6,000 Equipment costs: $40,000 Software sales: $225,000 Instructions: Calculate the ROI for both alternatives, showing your calculations. Use the traditional ROI formula, which is: ROI = (Net Profit / Cost of Investment)* 100%. Give a recommendation which alternative will be better, based on your results and explain your decision.

Task 1 (10 points) A tech startup is considering developing a new software product. The projected costs and revenues are as follows: Research and development: $75,000; Manpower (salaries, etc.): $60,000; Equipment (computers, licenses, etc.): \$54,000; Marketing Costs: \$12,000; Operational Expenses (utilities, etc.): $8,900 The startup projects the following revenues from the software product over the next year: Software sales: $205,000; Service \& maintenance contracts: $5,700. Alternatively, the startup could decide to reduce costs by cutting down on marketing and equipment costs, and they manage to increase software sales. The new figures are: Marketing costs: $6,000 Equipment costs: $40,000 Software sales: $225,000 Instructions: Calculate the ROI for both alternatives, showing your calculations. Use the traditional ROI formula, which is: ROI= (Net Profit / Cost of Investment) +100% Give a recommendation which alternative will be better, based on your results and explain your decision