Cash flows. quick computing currently sells 10 million computer chips each year at a price of $20 per chip. it is about to introduce a new chip, and it forecasts annual sales of 12 million of these improved chips at a price of $25 each. however, demand for the old chip will decrease, and sales of the old chip are expected to fall to 3 million per year. the old chips cost $6 each to manufacture, and the new ones will cost $8 each. what is the proper cash flow to use to evaluate the present value of the introduction of the new chip? (lo9-1)

Since net revenue has increased from $140 million to $246 million = $106 million by considering all costs thus all the costs and revenue shall be considered.

Explanation:

For calculating the present value, all the cost and revenue will be considered.

Original revenue = Sale of 10 million chips

10 million $20 = $200 million

Less: Cost = 10 million $6 = $60 million

Net Revenue = $140 million

In case of introducing new chips

Revenue will be as follows

12 million $25 + 3 million $20

= $300 million + $60 million = $360 million

Less: Costs 12 million $8 + 3 million $6

= $96 million + $18 million = $114 million

Net Revenue = $360 - 114 = $246 million

Since net revenue has increased from $140 million to $246 million = $106 million by considering all costs thus all the costs and revenue shall be considered.

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

                                          hope it

answer trochanter; i believe this is correct, plz check first, good luck;