Aria Acoustics projects unit sales for a new seven octave voice emulation implant.

Year 1 Unit Sales: 74,000

Year 2 Unit Sales: 87,000

Year 3 Unit Sales: 101,000

Year 4 Unit Sales: 96,000

Year 5 Unit Sales: 77,000

Production of implants will require $1,530,000 in net working capital to start and additional investments each year equal to 20 percent of the projected sales increase for the following year.

Total fixed costs are $1,430,000 per year, variable production costs are $230 per unit, and units are priced at $345.00 each. Equipment installation cost is $20,300,000.

Equipment qualifies as seven year MACRS property. In five years, this equipment can be sold for about 25 percent of acquisition cost. AAI is in the 30 percent marginal tax bracket and has a required rate of return on all projects of 19 percent.

1. What is the NPV of the project?
2. What is the IRR?