Using the proposal model from the content for this week for NBPS (attached here) to determine:
the break even point of the 2011 Electronic Book Revenues (which affects all future revenues), the present worth of each of the following three scenarios prepared by Jack, Rory and Ridley, and the expected present worth of the proposal if all three forecasts are equally probable. Discuss the implications of your results in a paragraph.
The Scenario analysis capability in Excel is recommended to accomplish this. If your computer/software has problems running a scenario analysis, copy the spreadsheet into two additional tabs, label the three scenario tabs as Jack, Rory and Ridley, and determine the results for each scenario using the following data respectively.
Scenario
2011 Electronic Revenues
Electronic % increase
Printed % decrease
COGS % Printed
COGS % Electronic
Jack
$8,000,000
8%
4%
70%
40%
Rory
$14,000,000
12%
9%
60%
30%
Ridley
$12,000,000
10%
8%
65%
30%