TechWave Inc. is a technology company that has been developing innovative software solutions for the past five years. The company is considering a major investment in new technology development, which is expected to enhance its product offerings significantly.

1. Current financials:
   1. Current Annual revenue $100 million
   2. Operating margin 30%
   3. Current annual operating income $30 million
2. Market Context
   1. Technology sector is growing at annual rate of 5%
   2. Company operates in a competitive market.
3. Investment opportunity
   1. TechWave is considering investing $10 million in new technology.
   2. Investment is expected to increase operating income by 40%
4. Taxation and other Financial assumptions
   1. Corporate tax rate 30%
   2. Discount rate for NPV calculation 8%
   3. Perpetual growth rate for enterprise value calculation 3%

Financial Projections and Assumptions

1. Revenue Growth
   1. Projected to grow at compounded annual growth rate (cagr) 5%
2. Operations Income
   1. Calculated as 30% of revenue each year.
3. After tax return on Capital
   1. Increased operating income due to investment: 40% higher than current.
   2. After tax calculation incorporates a 30% corporate tax rate
4. Cash Flow Analysis
   1. Incremental cash flow starting at 2 million in the first year, growing at 10% annually.

Estimate the operating income over the next 10 yrs.

Estimate the after-tax return on capital for the investment over this period.

Based on the after-tax return, decide whether to accept or reject TechWave as equity in your stock portfolio

Estimate the after-tax incremental cash flows from the investment over the next 10 years.

If the investment is terminated at the end of the 10^th year, estimate the net present value (NPV) of the organization.

If the investment is long-term, estimate the enterprise value, assuming ongoing investments and cash flows.

Discuss the key assumptions about market trends and regulatory requirements.