What interest rate is it profitable

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Reference no: EM132225374

A software company is considering translating its program into French. Each unit of the program sells for $50 and incurs a variable cost of $10 to produce.

Currently, the size of the market for the product is 300,000 units per year, and the English version of the software has a 30% share of the market. The company estimates that the market size will grow by 10% a year for the next 5 years, and at 5% per year after that.

It will cost the company $6 million to create a French version of the program. The translation will increase its market share to 40%.

Given a 10-year planning horizon, for what interest rate (??) is it profitable to create the French version of the software?

Reference no: EM132225374

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