Aria Acoustics, Incorporated $($AAI$),$ projects unit sales for a new seven$-$octave voice

emulation implant as follows:

Production of the implants will require $$2\mathrm{.}3$ million 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 $$2\mathrm{.}9$ million per year,

variable production costs are $$285$ per unit, and the units are priced at $$410$ each. The

equipment needed to begin production has an installed cost of $$14\mathrm{.}8$ million. 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 is $18$ percent. MACRS schedule.

What is the NPV of the project? $($Do not round intermediate calculations and enter your

answer in dollars, not millions of dollars, rounded to $2$ decimal places, e$.$g$.,$

$1,234,567\mathrm{.}89.$

What is the IRR of the project? $($Do not round intermediate calculations and enter your

answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Aria Acoustics, Incorporated $($AAI$),$ projects unit sales for a new seven$-$octave voice

emulation implant as follows:

Production of the implants will require $$2\mathrm{.}3$ million 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 $$2\mathrm{.}9$ million per year,

variable production costs are $$285$ per unit, and the units are priced at $$410$ each. The

equipment needed to begin production has an installed cost of $$14\mathrm{.}8$ million. 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 is $18$ percent. MACRS schedule.

What is the NPV of the project? $($Do not round intermediate calculations and enter your

answer in dollars, not millions of dollars, rounded to $2$ decimal places, e$.$g$.,$

$1,234,567\mathrm{.}89.)$

What is the IRR of the project? $($Do not round intermediate calculations and enter your

answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$