Project Yr Calendar Yr Year - 1 2019 Year o 2020 Year 1 2021 Year 2 2022 Year 3 2023 Year 4 2024 Year 5 2025 Sales Volume 0001 Price/Unit is in thousands) Sales Revenue Cannibalize Sales Incremental Sales Production Volume 0001 Variable Cost/Unit Variable Cost Depreciation Other Fixed COGS Cannibalize Benefit Incremental COGS Gross Profit Lost Rental Income SG&A - recurring Advertising Launch RD & E Incremental Opex EBIT (Operating Profit) NOPAT Depreciation Capex Change NWC Unlevered FCF HomeNet FCF Capital Budgeting Model - Final Project Cisco is considering a wireless network device for 'smart' homes A $300k feasibility study last year supports 100k units/yr @ $375 retail price Wholesale price $260/unit; $60/unit variable; $5,000k fixed (excl deprec) Yr O RD&E $15,000k to design & build software and hardware Yr 0 Capex $7,500k for equipment and mfg systems (5-year life) Yr 1-4: SG&A $2,800/yr; continuing RD&E for mfg & mktg $1,000k/yr Effective tax rate 20%; Acct Rec = 15% of sales; Acct Pay = 15% of COGS Externalities: 25% of HomeNet sales cannibalize Cisco's base unit ($100 price; $60/unit VC) HomeNet will utilize existing building; Cisco will lose $200k/yr in rental income Analyze the proposed HomeNet business unit using an Excel model . Using a 12% WACC: NPV? IRR? MIRR? Payback?