Aria Acoustics, Inc. $($AAI$),$ projects unit sales for a new seven$-$octave voice emulation implant as follows:

Production of the implants will require $$1,660,000$ in net working capital to start and additional net working capital investments each year equal to $15$ percent of the projected sales increase for the following year. Total fixed costs are $$1,560,000$ per year, variable production costs are $$295$ per unit, and the units are priced at $$410$ each. The equipment needed to begin production has an installed cost of $$21,600,000.$ 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 $20$ percent of its acquisition cost. The tax rate is $21$ percent and the required return on the project is $18$ percent. Refer to Table $8\mathrm{.}3.$ a$.$ What is the NPV of the project? $($Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$ b$.$ What is the IRR? $($Do not round intermediate calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$ Depreciation is expressed as a percent of the asset's cost. These schedules are based on the IRS publication $946.$ How to Depreciate Property

and other details on depreciation are presented later in the chapter. Note that five$-$year depreciation actually carrits ower six years because the

IRS assumes purchase is made in midyear.