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Samsung Inc. estimate unit sales for a new music amplifier as follows: 75,000; 86,000; 95,000; 92,000;...
Samsung Inc. estimate unit sales for a new music amplifier as follows: 75,000; 86,000; 95,000; 92,000; and 73,000 for year 1 through year 5, respectively.
Production of the implants will require $1,600,000 in net working capital to start and additional net working capital investments each year equal to 18 percent of the projected sales increase for the following year. Total fixed costs are $1,800,000 per year, variable production costs are $250 per unit, and the units are priced at $340 each. The equipment needed to begin production has an installed cost of $16,200,000. 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 firm is in the 37 percent marginal tax bracket and has a required return on all its projects of 16 percent. Based on these preliminary project estimates, what is the NPV of the project? What is the IRR?
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jeff jeffy answered 1 year agoRelated Solutions
Samsung Inc. estimate unit sales for a new music amplifier as follows: 75,000; 86,000; 95,000; 92,000;...
Samsung Inc. estimate unit sales for a new music amplifier as
follows: 75,000; 86,000; 95,000; 92,000; and 73,000 for year 1
through year 5, respectively. Production of the implants will
require $1,600,000 in net working capital to start and additional
net working capital investments each year equal to 18 percent of
the projected sales increase for the following year. Total fixed
costs are $1,800,000 per year, variable production costs are $250
per unit, and the units are priced at $340...
Aday Acoustics, Inc., projects unit sales for a new seven-octave voice emulation implant as follows: Year...
Aday Acoustics, Inc., projects unit sales for a new seven-octave
voice emulation implant as follows: Year Unit Sales 1 75,000 2
88,000 3 102,000 4 97,000 5 78,000 Production of the implants will
require $1,540,000 in net working capital to start and additional
net working capital investments each year equal to 10 percent of
the projected sales increase for the following year. Total fixed
costs are $1,440,000 per year, variable production costs are $235
per unit, and the units are...
Aylmer-in-You (AIY) Inc. projects unit sales for a new opera tenor emulation implant as follows: Year...
Aylmer-in-You (AIY) Inc. projects unit sales for a new opera
tenor emulation implant as follows: Year Unit Sales 1 99,000 2
113,000 3 123,000 4 143,000 5 88,000 Production of the implants
will require $737,000 in net working capital to start and
additional networking capital investments each year equal to 20% 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...
Aria Acoustics, Inc., (AAI) projects unit sales for a new seven-octave voice emulation implant as follows:...
Aria Acoustics, Inc., (AAI) projects unit sales for a new
seven-octave voice emulation implant as follows:
Year
Unit
Sales
1
110,500
2
129,500
3
117,500
4
100,500
5
86,500
Production of the implants will require $1,750,000 in net working
capital to start and additional net working capital investments
each year equal to 20 percent of the projected sales increase for
the following year. Total fixed costs are $1,400,000 per year,
variable production costs are $230 per unit, and the...
Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows:...
Aria Acoustics,
Inc. (AAI), projects unit sales for a new seven-octave voice
emulation implant as follows:
Year
Unit Sales
1
73,000
2
86,000
3
105,000
4
97,000
5
67,000
Production of
the implants will require $1,500,000 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 $3,200,000 per year, variable
production costs are $255 per unit, and the units...
Aylmer-in-You (AIY) Inc. projects unit sales for a new opera tenor emulation implant as follows: Year...
Aylmer-in-You (AIY) Inc. projects unit sales for a new opera
tenor emulation implant as follows:
Year
Unit Sales
1
101,000
2
115,000
3
125,000
4
145,000
5
90,000
Production of the implants will require $753,000 in net working
capital to start and additional net working capital investments
each year equal to 15% 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.)...
Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows:...
Aria Acoustics, Inc. (AAI), projects unit sales for a new
seven-octave voice emulation implant as follows:
Year
Unit Sales
1
90,000
2
103,000
3
117,000
4
112,000
5
93,000
Production of the implants will require $1,690,000 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 $1,590,000
per year, variable production costs are $310 per unit, and the
units...
Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows:...
Aria Acoustics, Inc. (AAI), projects unit sales for a new
seven-octave voice emulation implant as follows:
YEAR
UNIT SALES
1
80,000
2
97,000
3
109,000
4
103,000
5
78,000
Production of the implants will require $1,600,000 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 $1,900,000
per year, variable production costs are $195 per unit, and the
units...
Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows:...
Aria Acoustics, Inc. (AAI), projects unit sales for a new
seven-octave voice emulation implant as follows:
▪ The company has spent $150,000 for a marketing study to
evaluate the project. The study shows that the company will sell
75,000 units per year for 6 years. In addition, the company will
lose sales of 12,000 units per year of its high priced voice
emulation implant.
▪ The variable production costs for new voice emulation implant
are $260 per unit, and the...
Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows:...
Aria Acoustics, Inc. (AAI), projects unit sales for a new
seven-octave voice emulation implant as follows:
Year
Unit Sales
1
76,400
2
89,400
3
109,250
4
102,100
5
69,000
Production of the implants will require $2,350,000 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 $4,900,000
per year, variable production costs are $272 per unit, and the
units...
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