Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please add the decimals to the answer. please help me get the right answer! the npv isnt 2,640,746 the irr is not 22.76% Aria Acoustics,

please add the decimals to the answer.
please help me get the right answer!
the npv isnt 2,640,746
the irr is not 22.76%
image text in transcribed
image text in transcribed
Aria Acoustics, Inc. (AAl), projects unit sales for a new seven-octave voice emulation implant as follows: Production of the implants will require $1,670,000 in net working capital to start and additional net working capital investments each year equal to 10 percent of the projected sales increase for the following year. Total fixed costs are $1,570,000 per year, variable production costs are $300 per unit, and the units are priced at $415 each. The equipment needed to begin production has an installed cost of $21,700,000. 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 15 percent of its acquisition cost. The tax rate is 22 percent and the required return on the project is 17 percent. Refer to Table 8.3. a. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the IRR? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) TABLE 8.3 Depredation under Modified Accelerated Cost Recovery System (MACRS) IhS assumes purchasa is made in micyear

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Audit Is A Powerful Management Tool

Authors: Fateh Bouchene

1st Edition

6204366548, 978-6204366548

More Books

Students also viewed these Accounting questions