Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows:

YearUnit Sales173,000286,0003100,000495,000576,000

Production of the implants will require $1,520,000 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 following year. Total fixed costs are $1,420,000 per year, variable production costs are $225 per unit, and the units are priced at $340 each. The equipment needed to begin production has an installed cost of $20,200,000. Because the implants are intended for professional singers, this equipment is considered industrial machinery and thus qualifies as seven-year MACRS property. In five years, this equipment can be sold for about 20 percent of its acquisition cost. AAI is in the 35 percent marginal tax bracket and has a required return on all its projects of 18 percent.Table 8.3.

What is the NPV of the project?(Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)

NPV$?

What is the IRR?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

IRR% ?

TABLE 8.3 RECOVERY PERIOD CLASS Depreciation under Modified Accelerated Cost Recovery YEAR 3 YEARS 5 YEARS 7 YEARS 10 YEARS 15 YEARS 20 YEARS System (MACRS) 3333 .2000 .1429 .1000 0500 .03750 W N - 4445 .3200 2449 .1800 .0950 .07219 1481 .1920 1749 .1440 0855 .06677 0741 .1152 .1249 .1152 0770 06177 .1152 .0893 .0922 .0693 .05713 0576 .0892 .0737 0623 .05285 .0893 .0655 0590 .04888 0446 .0655 0590 .04522 .0656 .0591 .04462 .0655 0590 .04461 .0328 0591 .04462 12 0590 04461 13 .0591 .04462 14 0590 04461 15 0591 .04462 16 .0295 04461 17 .04462 18 .04461 19 .04462 20 04461 21 .02231 Depreciation is expressed as a percent of the asset's cost. These schedules are based on the IRS publication 946. How to Depreciate Property and other details on depreciation are presented later in the chapter. Note that five-year depreciation actually carries over six years because the IRS assumes purchase is made in midyear