euenues. Average unit price is $10) First year estimated sales quantity of new roduct is 2,000 units. New sales quantity is expected to increase 5% the second ear. New products cannibalize $3,000 in sales of existing product each year. osts. Gross profit margin is 40% for new product and 30% for existing product. Forporate tax rate Tc = 40%. et Working Capital Requirements. Receivables average 12% of revenue. All receiv- bles are eventually collected. Payables average 10% of Cost of Goods Sold. All ayables are eventually paid. Inventory costs average 8% of Cost of Goods Sold. yentory costs each year will be taken begin-of-year and all inventory will be used.

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