A competitive advantage is a benefit that needs to be economic. Therefore, it is important for you to
calculate an estimate of how profitable the investment in your startup will be. Determine the net
present value (NPV) of an investment on the given information for a three-year planning period. What is
your conclusion based on the NPV value?
 market volume is 300,000 units per year
 current market share is 3%
 initial price per unit is 300 €; price reduction by 1% per year
 price elasticity: -2
 variable costs per unit are 125 €
 annual fixed costs are 1.0 million €
 initial investment is 1.5 million €
interest rate is 5%