Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. aria acoustics, inc. (aai), projects unit sales fo

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

80.2K

Verified Solution

Question

Finance

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

YearUnit Sales
173,400
286,400
3105,500
4976,600
567,500

Production of the implants will require $1,600,000 in networking capital to start and additional net working capitalinvestments each year equal to 15 percent of the projected salesincrease for the following year. Total fixed costs are $3,400,000per year, variable production costs are $257 per unit, and theunits are priced at $381 each. The equipment needed to beginproduction has an installed cost of $16,900,000. Because theimplants are intended for professional singers, this equipment isconsidered industrial machinery and thus qualifies as seven-yearMACRS property. In five years, this equipment can be sold for about20 percent of its acquisition cost. The tax rate is 22 percent therequired return is 14 percent.

The MACRS schedule:

YearThree-YearFive-YearSeven-Year
133.33%20.00%14.29%
244.4532.0024.49
314.8119.2017.49
47.4111.5212.49
511.528.93
67.768.92
78.93
84.46

a.) What is the NPV of the project?

b.)What is the IRR?

Answer & Explanation Solved by verified expert
4.2 Ratings (499 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

In one of Boston’s public parks, mugging in summer months has been a serious issue. A...

Statistics
Q

Know and describe the function of the phrenic nerve, the sciatic nerve, the brachical nerve and...

Medical Sciences
Q

Despite differing views on United States neutrality in World War I, what led citizens to...

Biology
Q

25% of the students attended the school dance. If 32 attended the dance, how many...

Basic Math
Q

A particular brand of laptop was sampled with regard to the time it can be...

Basic Math
Q

\begin{tabular}{|c|c|c|} \hline & 2025 & 2024 \\ \hline...

Accounting
Q

PR 9-41 (Algo) Revised Operating Budget; Consulting Firm (LO 9-2, 9-5, 9-7) Toronto Business Associates,...

Accounting
Q

33. Jade Jewelers issued 15,000 shares of $1 par value stock for $20 per share....

Accounting
Q

Determining Amount of PP&E to Capitalize AMP Corporation purchased new manufacturing equipment with an invoice...

Accounting
Q

Company B paid $25,000 cash for employees salaries. How should this be reported on its...

Accounting
Q

Classify each of the following costs as Product (direct/indirect) or Period and Variable, Fixed or...

Accounting
Q

Manor Manufacturing has recently tried to improve its analysis for its manufacturing process. Units started...

Accounting