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Aday Acoustics, Inc., projects unit sales for a new 7-octave voice emulation implant as follows: Year Unit Sales 1 72,600 2 78,000 3 83,000 4 80,900 5 67,100 Production...

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Finance

Aday Acoustics, Inc., projects unit sales for a new 7-octavevoice emulation implant as follows:

YearUnit Sales
172,600
278,000
383,000
480,900
567,100

Production of the implants will require $1,420,000 in networking capital to start and additional net working capitalinvestments each year equal to 15 percent of the projected salesincrease for the following year. Total fixed costs are $3,500,000per year, variable production costs are $137 per unit, and theunits are priced at $319 each. The equipment needed to beginproduction has an installed cost of $17,900,000. Because theimplants are intended for professional singers, this equipment isconsidered industrial machinery and thus qualifies as 7-year MACRSproperty. In five years, this equipment can be sold for about 20percent of its acquisition cost. The company is in the 22 percentmarginal tax bracket and has a required return on all its projectsof 16 percent. MACRS schedule.

  

What is the NPV of the project? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

What is the IRR of the project? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)

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