Relevant Cash Flows

Dell Computer will be introducing to the market place a variation of its current best selling laptop the XP900. The new version is similar to the old one expept that it has a live screen allowing for touch control which will be called the Geneuos XP. Dell estimates the new lap top will provide sales of $25million. Important to note is that 20 percent of those sales will be previous XP900 users who switched to the Geneuos XP. Theses same customers would not have switched to the new version if it had not been brought to market. What is the relevant sales level that should be considered when deciding whether or not to introduce the Geneuos?

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