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Homework answers / question archive / Quick Computing currently sells 17 million computer chips each year at a price of $22 per chip
Quick Computing currently sells 17 million computer chips each year at a price of $22 per chip. It is about to introduce a new chip, and it forecasts annual sales of 15 million of these improved chips at a price of $28 each. However, demand for the old chip will decrease, and sales of the old chip are expected to fall to 8 million per year. The old chips cost $7 each to manufacture, and the new ones will cost $10 each. What is the proper cash flow to use to evaluate the present value of the introduction of the new chip?
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