Cambridge Software Corp.

Harvard Business School Case #191-072

Case Software #XLS-116

Copyright © 2011 President and Fellows of Harvard College. No part of this product may be
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Exhibit 1 Cost, Demand, and Willingness-to-Pay Estimates

"Student" "Commercial" "Industrial"

Estimated product completion cost $100,000 $200,000 $500,000

Variable cost (per unit) $15 $25 $35
Segment Willingness-to-Pay
Market Segment Size Dev. Cost -----------------------(per unit)------------------------

Large, multidivisional corporations 5,000 $150,000 $150 $1,200 $2,500

Corporate R&D and university laboratories 2,000 $100,000 $100 $1,000 $2,000
Consultants and professional companies 20,000 $200,000 $200 $300 $600
Small businesses 15,000 $200,000 $175 $225 $300
Students 500,000 $300,000 $50 $60 $100