Alpha Geek

(8)

$10/per page/Negotiable

About Alpha Geek

Levels Tought:
University

Expertise:
Accounting,Algebra See all
Accounting,Algebra,Architecture and Design,Art & Design,Biology,Business & Finance,Calculus,Chemistry,Communications,Computer Science,Environmental science,Essay writing,Programming,Social Science,Statistics Hide all
Teaching Since: Apr 2017
Last Sign in: 442 Weeks Ago, 1 Day Ago
Questions Answered: 9562
Tutorials Posted: 9559

Education

  • bachelor in business administration
    Polytechnic State University Sanluis
    Jan-2006 - Nov-2010

  • CPA
    Polytechnic State University
    Jan-2012 - Nov-2016

Experience

  • Professor
    Harvard Square Academy (HS2)
    Mar-2012 - Present

Category > Accounting Posted 27 May 2017 My Price 7.00

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     91,000  
2     104,000  
3     118,000  
4     113,000  
5     94,000  
 

  

Production of the implants will require $1,700,000 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 $1,600,000 per year, variable production costs are $315 per unit, and the units are priced at $430 each. The equipment needed to begin production has an installed cost of $22,000,000. 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 15 percent of its acquisition cost. AAI is in the 30 percent marginal tax bracket and has a required return on all its projects of 17 percent. Table 8.3.

  

What is the NPV of the project? (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)

  

  NPV $   

  

What is the IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

  

  IRR

                           
                      IRR= 24.14%  
  Initial Outlay           Cashflow PV     PV  
    $1,700,000 Net working capital     0 $(23,700,000) $(23,700,000)     $(23,700,000)  
    $22,000,000 Equipment       1 $6,589,640 $5,632,171     $5,308,096  
    $23,700,000         2 $8,266,340 $6,038,673     $5,363,736  
              3 $9,533,340 $5,952,337     $4,982,833  
    Unit sales Unit cost Unit price     4 $8,800,840 $4,696,569     $3,705,377  
  1 91,000 $315 $430     5 $12,796,760 $5,836,745     $4,339,957  
  2 104,000           NPV $4,456,494.77     $(0)  
  3 118,000                      
  4 113,000                      
  5 94,000                      
                           
  Sales - Fixed Cost - Variable Cost   tax 30%              
  1 $8,865,000     rate of return 17%              
  2 $10,360,000                      
  3 $11,970,000                      
  4 $11,395,000                      
  5 $9,210,000                      
                           
  Additional Working Capital*                    
  1 $559,000                      
  2 $602,000                      
  3 $(215,000)                      
  4 $(817,000)                      
    *if negative, we don't add additional working capital                
                           
  Depreciation Schedule                      
  1 14.29% $3,143,800                    
  2 24.49% $5,387,800                    
  3 17.49% $3,847,800                    
  4 12.49% $2,747,800                    
  5 8.93% $1,964,600                    
  6 8.92% $1,962,400                    
  7 8.93% $1,964,600                    
  8 4.46% $981,200                    
                           
                           
  Equipment Salvage

3,300,000

My answer is not correct???

                    
                           
                           
                           
                           
                           
                           
                           
                           
   %
 
 

Answers

Alpha Geek
(8)
Status NEW Posted 27 May 2017 05:05 PM My Price 7.00

-----------

Attachments

file 1495905486-Answer.docx preview (453 words )
A-----------ria----------- Ac-----------ous-----------tic-----------s, -----------Inc-----------. (-----------AAI-----------), -----------pro-----------jec-----------ts -----------uni-----------t s-----------ale-----------s f-----------or -----------a n-----------ew -----------sev-----------en------------oct-----------ave----------- vo-----------ice----------- em-----------ula-----------tio-----------n i-----------mpl-----------ant----------- as----------- fo-----------llo-----------ws:----------- Y-----------ear----------- Un-----------it -----------Sal-----------es ----------- 1 -----------91,-----------000----------- 2 -----------104-----------,00-----------0 3----------- 11-----------8,0-----------00 -----------4 1-----------13,-----------000----------- 5 -----------94,-----------000-----------  -----------  ----------- Pr-----------odu-----------cti-----------on -----------of -----------the----------- im-----------pla-----------nts----------- wi-----------ll -----------req-----------uir-----------e $-----------1,7-----------00,-----------000----------- in----------- ne-----------t w-----------ork-----------ing----------- ca-----------pit-----------al -----------to -----------sta-----------rt -----------and----------- ad-----------dit-----------ion-----------al -----------net----------- wo-----------rki-----------ng -----------cap-----------ita-----------l i-----------nve-----------stm-----------ent-----------s e-----------ach----------- ye-----------ar -----------equ-----------al -----------to -----------10 -----------per-----------cen-----------t o-----------f t-----------he -----------pro-----------jec-----------ted----------- sa-----------les----------- in-----------cre-----------ase----------- fo-----------r t-----------he -----------fol-----------low-----------ing----------- ye-----------ar.----------- To-----------tal----------- fi-----------xed----------- co-----------sts----------- ar-----------e $-----------1,6-----------00,-----------000-----------
Not Rated(0)