A company producing certain products has concluded to have the following estimated data over its 5-year projection plan:
|
1st year
($ mil)
|
2nd year
|
3rd year
|
4th year
|
5th year
|
|
Total Expenses
|
0.75
|
0.65
|
0.6
|
0.6
|
0.65
|
|
Cum Expenses
|
|
|
|
|
|
|
Total Revenues
|
0
|
0.75
|
1.0
|
1.3
|
1.2
|
|
Cum Revenues
|
|
|
|
|
|
Please plot the above data to represent cumulative costs versus cumulative revenues over the 5-year projections on the following table to extrapolate the breakeven point for this project. Express the minimum amount of investment you need to operate and deliver this project, indicating the best ROI at the end of 5th year, based on:
(a) Investment amount = Breakeven;
(b) Cash investment of 20% down & 80% loan.