This problem continues the Haupt Consulting, Inc., situation from Problem 18-34 of Chapter 18. Haupt Consulting provides consulting service at an average price of $100 per hour and incurs variable costs of S40 per hour. Assume average fixed costs are $4,000 a month.
Haupt has developed new software that will revolutionize billing for companies. Haupt has already invested $300,000 in the software. It can market the software as is at $50,000 a client and expects to sell to eight clients. Haupt can develop the software further, adding integration to Microsoft products at an additional development cost of $150,000. The additional development will allow Haupt to sell the software for $60,000 each, but to ten clients.
Requirement
1. Should Haupt sell the software as is or develop it further?
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