Question: This problem continues the Davis Consulting, Inc. situation from Problem P24- 28 of Chapter 24. Davis Consulting provides consulting services at an average price of

This problem continues the Davis Consulting, Inc. situation from Problem P24- 28 of Chapter 24. Davis Consulting provides consulting services at an average price of $ 175 per hour and incurs variable costs of $ 100 per hour. Assume average fixed costs are $ 5,250 a month. Davis has developed new software that will revolutionize billing for companies. Davis has already invested $ 200,000 in the software. It can market the software as is at $ 30,000 per client and expects to sell to eight clients. Davis can develop the software further, adding integration to Microsoft products at an additional development cost of $ 120,000. The additional development will allow Davis to sell the software for $ 38,000 each, but to 20 clients. Should Davis sell the software as is or develop it further?

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