product is fully obsolete. In years $1$ through $5,$ you will have fixed costs associated with the product of $$100,000$ per year, and variable costs equal to $50\%$ of revenues.

a$.$ What are the cash flows for the project in years $0$ through $5?$

b$.$ Plot the NPV profile for this investment from $0\%$ to $40\%$ in $10\%$ increments.

c$.$ What is the project's NPV if the project's cost of capital is $10\%?$

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.

Cost of Capital

Revenues

yoy growth

Variables Costs

$(\%$ of sales$)$

Fixed Costs

Investment

Total Cashflow

Discount factor

PV

NPV

IRR

Discount Rate

$10\mathrm{.}00\%$

Year $0$

Year $1$

Year $2$

Year $3$

Year $4$

Year $5$