For D, use the graph below

You are CEO of Rivet Networks, maker of ultra-high performance network cards for gaming computers, and you are considering whether to launch a new product. The product, the Killer X3000, will cost $890,000 to develop up front (year o), and you expect revenues the first year of $808,000, growing to $1.41 million the second year, and then declining by 35% per year for the next 3 years before the product is fully obsolete. In years 1 through 5, you will have fixed costs associated with the product of $106,000 per year, and variable costs equal to 55% of revenues. a. What are the cash flows for the project in years 0 through 5? b. Plot the NPV profile for this investment using discount rates from 0% to 40% in 10% increments. c. What is the project's NPV if the project's cost of capital is 10.5%? d. Use the NPV profile to estimate the cost of capital at which the project would become unprofitable; that is, estimate the project's IRR. a. What are the cash flows for the project in years 0 through 5? Calculate the cash flows below: (Round to the nearest dollar.) 1 2 3 4 5 0 $ 808,000 $ 1,410,000 74.5% (35%) (35%) (35%) Revenues YOY growth Variable costs % of sales Fixed costs Investment 55% 55% 55% 55% 55% (890,000) (890,000) Total cash flows c. What is the project's NPV if the project's cost of capital is 10.5%? The NPV is $. (Round to the nearest dollar.) d. Use the NPV profile to estimate the cost of capital at which the project would become unprofitable; that is, estimate the project's IRR. (For a zoom in on the NPV profile, click here.) Based on the NPV profile, the approximate internal rate of return is %. (Round to the nearest integer.) Graph/Chart - X NPV Profile 200,000 100,000 NPV ($) - 10 15 20 25 30 35 40 -100,000 -200,000 Discount Rate (%) Print Done