QUT corporation projects their future unit sales for a new headphone. The projected unit sales are as below.

	1	2	3	4	5
Unit sales	75000	88000	120000	95000	60000

To produce the headphones, the initial net working capital of $2,000,000 is required and additional net working capital is also required each year, which is 20% of the projected sales increase for the following year. The net working capital will be recovered at the end of a project. In addition, the initial installation cost of the machine for production is $18,000,000. The machine will be depreciated for tax purposes using straight-line depreciation with the useful life of 6 years. Also, costs and unit price are as below.

Fixed cost	$2,800,000 per year
Variable cost	$295 per unit
Price	$420 per unit

In five years, the machine can be sold for about 30% of its acquisition cost. The tax rate is 30% and the required rate of return is 15%.

Required

1. What is the NPV of the project? Explain and defend your processes, answer, and calculations clearly.
2. Assuming that the project can be repeated indefinitely, what is the NPV of the project? Explain and defend your processes, answer, and calculations clearly.