Previous discussion link debating whether The Prince was intended as satire, or a serious work. One can assume the intended audience from that context.

Another link about what we regarding how the work was actually received in it's time.

Pinging /u/ninedivine_ for his excellent sources.

So, since /u/Bannedfromfun pinged me I will try to answer your question, but I think that /u/CogitoErgoDoom's answer in the linked discussion is excellent and you should read that too.

About your question, I can't find my notes about "Il principe" but I found my literature book, Visibile parlare by Marta Sambugar and Gabriella Salà, unfortunately only in Italian, and my copy of Machiavelli's book, where I found the sentence in question, not in Chapter 16 but in Chapter 15 ( De his rebus quibus homines et praesertim principes laudantur aut vituperantur that means, more or less, "About those things that makes men, and princes especially, to be lauded or reviled").

I think that your problem lies in a misunderstanding of the text, probably because of the translation, but I will say a couple of things about Machiavelli's goal with this book. He first talk about this work in a letter, dated 10th December, 1513, to Francesco Vettori, who is Florence's ambassador in Rome and a friend of Machiavelli. Machiavelli has already been exiled from Florence and has a lot of free time, which he spends mostly studying Latin, Greek and Italian literature. Influenced by them, he has written "uno opuscolo, De Principatibus" ("a pamphlet (?), About princedom"), that he thinks will be extremely useful to any prince, especially a new one. He wants to send it to Giuliano de' Medici, Lorenzo il Magnifico's son, so to teach him what to do once he become prince. He then changes his mind, and decides to dedicate it to Lorenzo hoping to be welcome in Florence once again (and hopefully working for the Medicis) and, as we read in the final chapter of the book, to give the Medicis the means to liberate Italy from the "barbarians": though this celebration is still a not-so-subtle way to tell Lorenzo "Please, hire me back!".

I have no other sources telling me about any other possible audience for this book, except from the Straussian theory that /u/CogitoErgoDoom talks about in his answer. I have look to the sentence you mentioned (which is in chapter 15, not 16!!) and I think you misunderstood what Machiavelli meant. The original text is this: "Ma, sendo l'intento mio scrivere cosa utile a chi la intende, mi è parso più conveniente andare drieto alla verità effettuale della cosa, che alla immaginazione di essa". This is an extremely important passage in the book, since Machiavelli talks about "la verità effettuale" (or "effettiva"), meaning he will waste no time in ethics or utopias, but he will be pragmatic and realist etc etc (I don't wanna make an essay about it, but it is obviously very important to understand Machiavelli's work). A rough and literal translation would be: "But, since my goal is to write something useful to those who (wants to) understand it, in my opinion the best thing to do is to write about the truth/the real world, and not about something fictional". In italics is the translation of the sentence you are talking about, and in bracket a little something that Sambugar & Salà added in their paraphrase of the text.

"Intendere" in Italian does not mean "to know" but to understand, and is often used in the meaning of "to be willing to understand": Machiavelli here wants to make clear that he is not writing for people who think they know everything about the subject, but for those who are not scared to look at the gritty reality and thinks they could be better princes.

This is just my opinion anyway, so if a real expert, or even better a good Italian to English translator could chime in it would be perfect. And, as usual, sorry for my broken English.