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 $$900,000$ to develop up front $($year $0),$ and you expect revenues the first year of $$800,000,$ growing to $$1\mathrm{.}50$ million the second year, and then declining by $40\%$ per year for the next $3$ years before the product is fully obsolete. In years $1$ through $5,$ you will have fixed costs associated with the product of $$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 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 $10\mathrm{.}0\%?$

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.

$\backslash$table$[[$Year$,,0,1],[$Revenues$,$$$,0$$$,800,000],[$YOY Growth$],[$Variable Costs$],[\%$ of Sales,,,$50\%$