noe between 2 project nvert Fyrl CF yra 800 PART 5 Capital Budgeting CHALLENGE (Questions 29-30) iects unit sales for a ne LO 2 29. Project Evaluation Aria Acoustics, Inc. (AAI), projects seven-octave voice emulation implant as follows: CHAPTE Conch F Year Unit Sales 71,500 87,800 104,300 89,200 75,300 Conch Repu manufactu pany presiden pany. The com household ap 70 years ago panded, and i ous specialty million in net working capital to Production of the implants will require $1.5 million in net working start and additional net working capital investments each vear a 15 percent of the projected sales increase for the following vear Total costs are $2.15 million per year, variable production costs are $230 per un and the units are priced at $375 each. The equipment needed to begin produce tion has an installed cost of $20.5 million. 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 equip ment can be sold for about 20 percent of its acquisition cost. AAI has a 21 percent tax rate and 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? MBA graduate nance departe One of t! factured by C public currer market and s is a unique it colors and is sic. However