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1. Take Five Systems, a new start-up, is developing a new iPhone application (“app”) and provides...

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Finance

1. Take Five Systems, a new start-up, is developing a new iPhoneapplication (“app”) and provides you with the followingassumptions: a. Development and testing of the new app will takefour months. Month five is the first month of revenue generation.b. Initial monthly app sales of 5,000 downloads at a price of $2.99c. Unit sales will grow at 15% per month for months six throughtwelve and then will be flat thereafter d. The app will becomeobsolete and will need to be revised/replaced after month 18 Usethe data provided to forecast Take Five’s monthly revenue forMonths 1-18

2. Take Five Systems is concerned about the accuracy of theirrevenue estimates in Question 1. Specifically, they wish to usesensitivity analysis to evaluate the impact on Month 18 revenue ofthe following: a. Variations in 2% increments between 9-21% in thegrowth rate of unit sales in Months 5-12 (that is, 9%, 11%,…, 19%,21%) b. Variation in 500 unit increments between 2,500 and 7,500 inthe level of initial sales (that is, 2,500, 3,000,…, 7,000,7,500)

could you please show me how to do question 2 on excel? Thankyou

Answer & Explanation Solved by verified expert
4.3 Ratings (731 Votes)
Q1Unit Sales in Month 5 5000Unit Sales in Month 6 575050001015Unit Salesin Month N1115 Unit sales Month NN1 or12ABA299MonthUnit    See Answer
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