Tech Product Launch Feasibility Study

SmartHome Solutions plans to release a new line of AI$-$driven home security systems. The

company gathered the following data:

The target market has $1,000,000$ households, with $39\%$ interested in upgrading their home

security technology. Surveys indicate that $22\%$ of those households are interested in AI$-$based

solutions. This interest in AI is projected to increase by $15\%$ annually. The general population

growth is steady at $3\%$ annual rate

Smart Home Solutions aims to reach $8\%$ market penetration in the first year, $15\%$ in the second

year, and $20\%$ in the third year. In a worst$-$case scenario, the penetration rates are $3\%$ in the first

year, $6\%$ in the second year, and $8\%$ in the third year.

a$)$ Calculate the potential number of customers in the best$-$case scenario over the next three

years.

b$)$ Determine the potential number of customers in the worst$-$case scenario over the same

period.

c$)$ If the expected scenario results in half of the best$-$case scenario penetration rates, calculate

the number of customers for each year.

$3.$ Advanced Break$-$Even Analysis and Profitability

A digital consulting agency offers three services with different hourly rates:

$-$ Data Analysis: $$400$ per hour

$-$ Market Research: $$350$ per hour

$-$ Strategic Planning: $$500$ per hour

The variable costs for each service are: