Samsung Inc. estimate unit sales for a new music amplifier as follows: 75,000; 86,000; 95,000; 92,000;...

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Samsung Inc. estimate unit sales for a new music amplifier asfollows: 75,000; 86,000; 95,000; 92,000; and 73,000 for year 1through year 5, respectively. Production of the implants willrequire $1,600,000 in net working capital to start and additionalnet working capital investments each year equal to 18 percent ofthe projected sales increase for the following year. Total fixedcosts are $1,800,000 per year, variable production costs are $250per unit, and the units are priced at $340 each. The equipmentneeded to begin production has an installed cost of $16,200,000.This equipment is considered industrial machinery and thusqualifies as seven-year MACRS property. In five years, thisequipment can be sold for about 20 percent of its acquisition cost.The firm is in the 37 percent marginal tax bracket and has arequired return on all its projects of 16 percent. Based on thesepreliminary project estimates, what is the NPV of the project? Whatis the IRR?

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Samsung Inc. estimate unit sales for a new music amplifier asfollows: 75,000; 86,000; 95,000; 92,000; and 73,000 for year 1through year 5, respectively. Production of the implants willrequire $1,600,000 in net working capital to start and additionalnet working capital investments each year equal to 18 percent ofthe projected sales increase for the following year. Total fixedcosts are $1,800,000 per year, variable production costs are $250per unit, and the units are priced at $340 each. The equipmentneeded to begin production has an installed cost of $16,200,000.This equipment is considered industrial machinery and thusqualifies as seven-year MACRS property. In five years, thisequipment can be sold for about 20 percent of its acquisition cost.The firm is in the 37 percent marginal tax bracket and has arequired return on all its projects of 16 percent. Based on thesepreliminary project estimates, what is the NPV of the project? Whatis the IRR?