# Aday Acoustics, Inc., projects unit sales for a new 7-octave voice emulation implant as follows: Year

###### Question:

## Answers

NPV is $9,751,118.63

IRR is 34.99232%.

Explanation:

Net Present Value is the discounted value of all the future cash flows which is used by the firms to decide whether or not they should decide to take on a project or not.

IRR or internal rate of return is the percentage rate that the project will create for the firm.

As per MARCS schedule depreciation rates on 7-year MARCS property are 14.29% for year 1, 24.49% for year 2, 17.49% for year 3, 12.49% for year 4 and 8.93% for year 5.

Compute the book value of asset after year 5 using the equation as shown below.

Book value = Initial cost - Depreciation of year 1 - Depreciation of year 2 - Depreciation of year 3 - Depreciation of year 4 - Depreciation of year 5

= $19,000,000 - $2,715,100 - $4,653,100 - $3,323,100 - $2,373,100 - $1,696,700

= $4,238,900

Hence, book value of the asset after 5 years is $4,238,900.

Compute tax saving on the loss of sale of asset using the equation as shown below.

Tax saving = (Book value - Salvage Value) * Tax rate

= ($4,238,900 - $2,850,000) * 23%

= $319,447

Hence, tax saving on the sale of asset is $319,447.

Prepare the table to compute NPV and IRR using MS-Excel as follows:

(image attached below of full calculations)

[tex]Aday Acoustics, Inc., projects unit sales for a new 7-octave voice emulation implant as follows: Yea[/tex]

[tex]Aday Acoustics, Inc., projects unit sales for a new 7-octave voice emulation implant as follows: Yea[/tex]

better off having an absolute

Do you have a picture?