The estimated development cost of this new service is $12,000 for all the six locations. If...
The estimated development cost of this new service is $12,000 for all the six locations. If the ramp-up and marketing support cost are estimated at $2,300 for each location. Calculate the estimated cash flow for the six (6) consulting service locations if the total revenue for the entire locations is $19,816. Will the new consulting firm break even, make profit or loss for this new service? NB: This is a single time period cash flow question.
Homework Answers
Total cash flow
Total revenue= 19816
Less: estimated development cost= 12000
LesS:Total ramp up and marketing cost= 2300*6 = 13800
Net cash flow= -5984
Hence the new consulting firm will make a loss.
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The estimated development cost of this new service is $12,000
for all the six locations. If...
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