Tellitoit has an idea to sell beverages from on their own at better prices. In essence,...
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Tellitoit has an idea to sell beverages from on their own at better prices. In essence, when customers order food, they can also order beverages. However, Tellitoit themselves beverages. Each car can carry most commonly ordered beverages that are used when fulfilling the beverage orders. Naturally, Tellitoit does not want to be in conflict with rest Therefore, they have discussed this idea with the restaurants. It turns out that customers do not order beverages from restaurants so they do not stand to lose money. Rathe restaurants feel it would be better if Tellitoit would fill this gap as it would help customers enjoy the meal more. [Please note that this is a fictional case] • Tellitoit will get 50 000 orders in the first year of operation which would be year 1. Average order size is 2,4 €. • The revenue stream will grow at a rate of 9% per year. • Marketing will start with 13 000 € in year 1 and grow by 5% per year. • Cost of revenue is 40%. Cost of developer is 60 000 per person annually. • To get a kick-start, a campaign is planed for year 1 that will cost 12 000€. Initial investment in business development is 30 000 € upfront. • Development costs are estimated to 20 000€ in year 1. It is estimated that sales will begin in year 1 and the development will concern improvements. Maintenance is estimated to be 2 person-months € per year starting from year 1. • Maintenance cost will grow by 7% per year. Investment horizon is 4 years (excluding year 0) Rate of return is 25% Task: Given the above information, calculate the ROI of this investment (enter only integral number with no % sign). Answer: Tellitoit has an idea to sell beverages from on their own at better prices. In essence, when customers order food, they can also order beverages. However, Tellitoit themselves beverages. Each car can carry most commonly ordered beverages that are used when fulfilling the beverage orders. Naturally, Tellitoit does not want to be in conflict with rest Therefore, they have discussed this idea with the restaurants. It turns out that customers do not order beverages from restaurants so they do not stand to lose money. Rathe restaurants feel it would be better if Tellitoit would fill this gap as it would help customers enjoy the meal more. [Please note that this is a fictional case] • Tellitoit will get 50 000 orders in the first year of operation which would be year 1. Average order size is 2,4 €. • The revenue stream will grow at a rate of 9% per year. • Marketing will start with 13 000 € in year 1 and grow by 5% per year. • Cost of revenue is 40%. Cost of developer is 60 000 per person annually. • To get a kick-start, a campaign is planed for year 1 that will cost 12 000€. Initial investment in business development is 30 000 € upfront. • Development costs are estimated to 20 000€ in year 1. It is estimated that sales will begin in year 1 and the development will concern improvements. Maintenance is estimated to be 2 person-months € per year starting from year 1. • Maintenance cost will grow by 7% per year. Investment horizon is 4 years (excluding year 0) Rate of return is 25% Task: Given the above information, calculate the ROI of this investment (enter only integral number with no % sign). Answer:
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To calculate the Return on Investment ROI we need to determine the net profit generated by the inves... View the full answer
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
Posted Date:
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