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 $892,000 to develop up front (year 0), and you expect revenues the first year of $809,000, growing to $1.41 million the second year, and then declining by 45% 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 $101,000 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 10.8%? 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 3 4 1 809,000 $ $ 0 $ (45%) (45%) Revenues YOY growth Variable costs % of sales Fixed costs 404500 50% (101000) 2 1.410,000 74.3% 7 05000 50% (101000) (45%) N 50% (101000) 50% (101000) 50% (101000) Investment (892,000) (892,000) 000 Total cash flows 303500 604000 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 700.000 700.000 500.000 500,000 300,000 300,000 NPV ($) NPV ($) 100.0007 100.000 5 10 20 25 30 35 -100,000+ 40 10 15 20 30 35 40 -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 10.8%? 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.) Enter any number in the edit fields and then continue to the next