LO2 25. Project Evaluation. Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 67,500 83,900 98,700 86,000 72,000 2 3 4 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 following year. Total fixed costs are production costs are $230 per unit, and the units are priced at $355 each. The equipment needed to begin production has an are intended for professional singers, this equipment is considered industrial machinery and thus qualifies as seven-year MACRS property. In five years, this equipment 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 15 percent. Based on these preliminary project estimates, what is the NPV of the project? What is the IRR? $1,950,000 per year, variable installed cost of $18,500,000. Because the implants can be