A Company wants to undertake the first cut prototype building of a new product called Mercury.

Market study revealed the following:

Mercury promises a market demand in terms of topline growth of 10% for next 5 yrs and stabilizes thereafter.

Mercury cannibalizes existing product whose current sales is 500 MM USD

Contribution margin is 35%

Asset investment is 1,000 MM USD with a SLM method of Depreciation @ 10%

Other Fixed Costs amount to 7 MM/Yr and though inflation is 5%, the line managers are optimistic of 3.5% reduction y-o-y

Annually the asset maintainence is 100 MM and the write off on tools is 25%

The Cash to Cash Cycle for the first year is 60 days of Sales and progressively reduces 10 days y-o-y

CFO says that threshold return rate expected by capital providers is 10%

Taxation rate is 30%

WHAT IS THE FINANCIAL RETURNS PROMISED BY MERCURY