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 $896,000 to develop up front (year 0), and you expect revenues the first year of $809,000, growing to $1.44 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 $100,000 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 10.4%? 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.) 0 1 2 3 4 5 0 $ 809,000 $ Revenues YOY growth Variable costs 1,440,000 78% (35%) (35%) (35%) % of sales 55% 55% 55% 55% 55% Fixed costs Investment (896,000) (896,000) Total cash flows b. Plot the NPV profile for this investment using discount rates from 0% to 40% in 10% increments. The graph depicting the correct NPV profile is: (Select the best choice below.) OA. OB. NPV Profile NPV Profile 700.000 700,000 Q e 500.000 500.000 300,000 300,000 NPV ($) NPV ($) 100,000 100,000 15 40 15 20 215 - 100,000 - 100,000 -300,000 -300,000 Discount Rate (%) Discount Rate (%) c. What is the project's NPV if the project's cost of capital is 10.4%