Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1 1 Aria Acoustics, Incorporated ( AAI ) , projects unit sales for a new seven - octave voice emulation implant as follows: table
Aria Acoustics, Incorporated AAI projects unit sales for a new sevenoctave voice emulation implant as follows:
tableYearUnit Sales
Production of the implants will require $ million in net working capital to start and aditional nest wach year equal to percent of the projected sales increase for the following year. Total fixed costs are $ million per year, variable production costs are $ per unit, and the units are priced at $ each. The equipment needed to begin production has an installed cost of $ million. Because the implants are intended for professional singers, this equipment is considered industrial machinery and thus qualifies as sevenyear MACRS property. In five years, this equipment can be sold for about percent of its acquisition cost. The tax rate is percent and the required return is percent. MACRS schedule
a What is the NPV of the project?
Note: Do not round intermediate calculations and round your answer to decimal places, eg
b What is the IRR?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to decimal places, eg
tablea Net present value,,
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started