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Project Evaluation. Ana Acoustics Ind ), projects unit sales for a new seven-octave voice mulaton...

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Project Evaluation. Ana Acoustics Ind ), projects unit sales for a new seven-octave voice mulaton implant as follows eal Unlt sales 62.500 83 900 98/700 86,000 12000 3 5 Production of the implants will require $1,500 000 in net working capital to start and additional net working capital investments each year equal to 15 percent of the projected sales increase for the folowing year Total fixed costs are $1 950 000 per year variable production costs are $230 per unit and the units are priced at $355 each. The equipment needed to begin production nas an instaed cost of $18 500 000 Because the implants are intended for professional singers this equipment is considered industrial machinery and thus qualifies as seven-year MACRS property n five years this equipment can be sold for about 20 percent of ts acquisition cost AAI is in the 35 percent marginal tax bracket and has a required return on all ts projects of 15 percent Based h these preliminary project estimates what is the NPV of the project? What is the IRR? Step-by-step solution

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