$5$

$70,800$

To begin production, the company requires an initial net working capital investment of $$2,100,000,$ with additional NWC investments each year equal to $9\mathrm{.}5\%$ of the projected sales increase for the following year. Total fixed costs are $$4,200,000$ per year, variable production costs are $$312$ per unit, and the units are priced at $$429$ each. The equipment needed to begin prodaction has an installed cost of $$19,800,000.$ Because the implants are intended for professional singers, this equipenent is considered industrial machinery and thus qualifies as seven$-$year MACRS property. In five years, this equipment can be sold for about $18$ pereent of its acquisition cost. The tax rate is $23$ percem.

Property Class $(7-$year MACRS$)$:

$114\mathrm{.}29\%$

$2,24\mathrm{.}49\%$

$317\mathrm{.}49\%$

$4\mathrm{.}12\mathrm{.}49\%$

$5,8\mathrm{.}93\%$

$6,8\mathrm{.}92\%$

$7,8\mathrm{.}93\%$

$8,4\mathrm{.}46\%$