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Question: Project Evaluation. Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows:
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 $1,950,000 per year, variable production costs are $230 per unit, and the units are priced at $355 each. The equipment needed to begin production has an installed cost of $18,500,000. 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 20 percent of its acquisition cost. AAI is in the 35 percent marginal tax bracket and has a required return on all its projects of 15 percent. Based on these preliminary project estimates, what is the NPV of the project? What is the IRR?
Calculate the PV of the annuity using formula in module 2 and convert it to present value. Calculate PV of lump sum payable in year 40.
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consider the economic outlook for the next year in order to recommend the ideal portfolio to maximize the rate of
A Corporation is evaluating two systems. The Corporation revenue stream will not be affected by the choice of the systems, the projects are being evaluated through finding the PV of each set of costs.
a. If the firm pays out all of its annual earnings as dividends, what will be the dividend paid per share? b. What is the required rate of return (demanded by shareholders of this firm) implied by the current market price?
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In this assignment, you will use the Internet and other sources to gather and interpret information related to service and manufacturing organizations.
Griff's property tax is $670.64 and is due April 10. He does not pay until June 21. The county adds a penalty of 7.5% simple interest on unpaid tax. Find the penalty Griff will pay. (Assume there are 365 days in a year.)
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