Project Evaluation $($LO$2)$ Aylmer$-$in$-$You $($AIY$)$ Inc. projects unit sales for a new opera tenor emulation implant as follows:

Production of the implants will require $$800,000$ in net working capital to start and additional net working capital

investments each year equal to $40\%$ of the projected sales increase for the following year. $($Because sales are expected to fall

in Year $5,$ there is no NWC cash flow occurring for Year $4.)$ Total fixed costs are $$192,000$ per year, variable production

costs are $$295$ per unit, and the units are priced at $$395$ each. The equipment needed to begin production has an installed

cost of $$19\mathrm{.}5$ million. Because the implants are intended for professional singers, this equipment is considered industrial

machinery and thus falls into Class $8$ for tax purposes $(20\%).$ In five years, this equipment can be sold for about $30\%$ of its

acquisition cost. AIY is in the $40\%$ marginal tax bracket and has a required return on all its projects of $23\%.$ Based on these

preliminary project estimates, what is the NPV of the project? What is the IRR?