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Talk Alot is considering the production of a cell phone.The production facility and equipment will cost $75 million and will be depreciated on a 5-year

Talk Alot is considering the production of a cell phone.The production facility and equipment will cost $75 million and will be depreciated on a 5-year MACRS schedule. The phone will sell for $257, variable costs per car are $86, and fixed costs are $1.4 million per year. The company expects to sell 145,000, 170,000, 215,000, 195,000, and 160,000 each year for the next five years, respectively. The project will require an immediate investment of $2.7 million in NWC, which will be recovered at the end of the project. The tax rate will be 21 percent and the required return is 14 percent. The production facility can be sold for $3.9 million in 5 years, although the company plans to keep the facility for production of another model. What is the NPV and IRR for the new car?

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