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 $890,000 to develop up front (year 0), and you expect revenues the first year of $808,000, growing to $1.42 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 $99.000 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 9.3%? 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. Calculate the cash flows below. (Round to the nearest dollar.) 0 1 2 3 4 5 S OS 808,000 S 1,420,000 Revenues YOY growth Variable costs 75.7% (40%) (40%) (40%) % of sales 55% 55% 55% 55% 55% Fixed costs Investment (890,000) (890,000) 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.) . . NPV Profile Q NPV Profile 700,000 700,000 a a 500,000 500,000 300.000 300,000 100,000 100,000 10 15 sh 4h -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 9.3%? 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.)