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thanks! cost $900.000 to develop up front (year O) and you espect revenues the first year of $800,000, growing to $1.56millon the second year, and
thanks!
cost $900.000 to develop up front (year O) and you espect revenues the first year of $800,000, growing to $1.56millon the second year, and then decining by 45% per year for the neit J years before the product is fully obsclele. In years 1 through 5 , you wil have fised cosis associated with the product of $90,000 per year, and variable costs oqual to so\% of revenues a. What are the cash flews for the projoct in years o through 5 ? b. Plot the NoV prolle for this investment vieng discount rates from 0% to 40% in 10% increments. c. What is the projects Nov te the projects cost of captal ia 9.4\%? d. Use the NPV profle to estinate the cosl of capital ai which the project would become unprofiatile, that le, estimate the proiect's ifr. a. What are the cash flowe for the project in years 0 through 5 ? Calculate the cash fows beiow (Round to the nearem dolar) Step by Step Solution
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