Question

The worksheet title “Table 1” in the Excel file “Dayton Software Inc Table 1” provides an overview of the market research data K2 generated. The table shows the four market segments, the anticipated size of each segment, and each segment’s willingness to pay for the two different versions of Integrated. It also includes projected costs of production and marketing. You can see the estimated production completion
cost for each version, the variable cost per unit sold for each version and the segment development costs for each market segment.
After looking at Table 1, Peyton and Becky realized they had multiple, dynamic questions to answer. Should Dayton Software Inc. keep only one version of integrated? If so, which one? How should they price the products if they offer multiple versions?

Assignment:

Calculate the profit Dayton Software Inc. will realize from each “Willingness-to-pay” (price) listed in Table 1, for each version of Integrated, assuming only that version is offered. Please place these calculations into the tables included in the worksheet titled “Q3” within the Excel file “Dayton Software Inc Table 1.” Hints: (i) the prices will be different for the Standard and Enterprise versions of Integrated; (ii) assume the firm is unable to price discriminate within a given version of the software (meaning all customers must pay the same price for that version).

Table 1 Cost, Demand, and Willingness to Pay Estimates
					"Standard"	"Enterprise"
Estimated Production Completion Cost					$100,000	$200,000
Variable Cost (per unit)					$15	$25
Market Segment		Size	Segment Dev. Cost		Willingness-to-Pay (per unit)
Large corporations		8,000	$150,000		$250	$1,600
University laboratories		5,000	$100,000		$175	$1,000
Consultants		20,000	$200,000		$200	$250
Small businesses		15,000	$200,000		$150	$200

Standard Version						Enterprise Version
Price	Quantity	Total Revenue	Total Cost	Profit		Price	Quantity	Total Revenue	Total Cost	Profit
$       150						$       200
$       175						$       250
$       200						$    1,000
$       250						$    1,600

Answer 1

Below is the screenshot of the formula applied -

Below is the result -