You are preparing a sales forecast for NewCo Inc. The

You are preparing a sales forecast for NewCo Inc. The company has a prototype of its product and believes sales will begin 12 months from today. In this question, you will prepare a sales forecast for this business for the next 5 years using a Bass Diffusion Model.

The following facts relate to this plan:

§ First sale in 12 months, implying THIS year’s sales will be zero

§ The total market size is 100 million potential customers

§ In first year of sales, the company believes adoption will be .05% of the market or 50,000 customers

§ Study of the product and the potential customers has led to estimates for p + q = .5

§ Each new customer will purchase the product only once during the five-year forecast period

§ Each product will sell for $155 each