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Please use excel to answer questions and show work Aria Acoustics, Inc. (AAl), projects unit sales for a new seven-octave voice emulation implant as follows:
Please use excel to answer questions and show work
Aria Acoustics, Inc. (AAl), projects unit sales for a new seven-octave voice emulation implant as follows: Production of the implants will require $1,700,000 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 $3,600,000 per year, variable production costs are $259 per unit, and the units are priced at $387 each. The equipment needed to begin production has an installed cost of $17,300,000. 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 24 percent and the required return is 16 percent. MACRS schedule a. (3 points) What is the Initial Investment b. (1 point) What is the Deprecation Schedule c. (7 points) What is the Operating Cash Flow d. (4 points) What is the Terminal Value e. (4 points) What is the Payback, Net Present Value, Profit Index and the IRR? f. (1 point) Would you accept this project? WhyStep by Step Solution
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