You are the product manager of a toy company thinking of launching a new product, the indoor fort building kit. Your critics say these are just overpriced cardboard boxes, but you know this product will be successful and you seek out initial investors.

At the start of year 1 (right now), you will incur a cost of $4 million to build and staff a production factory. In year 1, you expect to sell 80,000 kits at a unit price of $25 each. The price of $25 will remain unchanged through years 1 to 5. Unit sales are expected to grow by the same percentage (g) each year. During years 1 to 5, you incur two types of costs: variable costs and fixed SG&A (selling, general, and administrative) costs. Each year, variable costs equal half of revenue. During year 1, SG&A costs equal 40% of revenue. This percentage is assumed to drop 2% per year, so during year 2, SG&A costs will equal 38% of revenue, and so on.

Your goal is to pay back the $4M investment by the end of year 5.