Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop...

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Innovation Company is thinking about marketing a new softwareproduct. Upfront costs to market and develop the product are$5,200,000. The product is expected to generate profits of$1,000,000 per year for ten years. The company will have to provideproduct support expected to cost $99,000 per year in perpetuity.Assume all income and expenses occur at the end of each year.
a. What is the NPV of this investment if the cost of capital is4.65%??
Should the firm undertake the? project? Repeat the analysis fordiscount rates of 2.95% and 9.73%?, respectively.
b. How many IRRs does this investment opportunity? have? ?(Hint: Consider the two alternative discount rates we used in ouranalysis in part? a.)??
c. Can the IRR rule be used to evaluate this? investment?Explain.

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Answer ABy applying the NPV function tab at excel the NPV is calculatedwhen cost of capital is 465One of the image is showing down below where the formula isNPVC2C4L4 to determine the NPV of cash inflows In the similarway the PV of recurring cash outflow is determinedNPV of cash inflowsDiscount rate465Time periodYear 1Y2Y3Y4Y5Y6Y7Y8Y9Y10Cash flow1000000100000010000001000000100000010000001000000100000010000001000000NPV785468269NPV of Cash outflowDiscount rate465Time periodYear 1Y2Y3Y4Y5Y6Y7Y8Y9Y10Cash See Answer

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Innovation Company is thinking about marketing a new softwareproduct. Upfront costs to market and develop the product are$5,200,000. The product is expected to generate profits of$1,000,000 per year for ten years. The company will have to provideproduct support expected to cost $99,000 per year in perpetuity.Assume all income and expenses occur at the end of each year.a. What is the NPV of this investment if the cost of capital is4.65%??Should the firm undertake the? project? Repeat the analysis fordiscount rates of 2.95% and 9.73%?, respectively.b. How many IRRs does this investment opportunity? have? ?(Hint: Consider the two alternative discount rates we used in ouranalysis in part? a.)??c. Can the IRR rule be used to evaluate this? investment?Explain.