Calculating the Cost of an E-Book

I've had a lot of positive feedback from my previous post entitled Weighing in on E-Books, so I wanted to talk about ways to calculate the cost of an e-book.

First, let's pull some arbitrary numbers. (And by arbitrary, I mean that these are not precise figures.) Let's say that we paid our author $3,000 for their novel that was 100,000 words in length, which is the equivalent of about 3 cents per word. Then, let's say we paid an editor a flat rate of $1,250 to edit the novel and an artist $500 ...