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Question;Otobai Company in Osaka, Japan is considering the introduction of an electrically powered motor scooter for city use. The scooter project requires an initial investment of ?15 billion. The cost of capital was assumed to be 10%. The initial investment can be depreciated on a straight-line basis over the 10-year period, and profits are taxed at a rate of 50%.Consider the following estimates for the scooter project.Market Size 1.1 millionMarket Share 0.1Unit Price ? 400,000.0Unit Variable Cost ? 360,000.0Fixed Cost ? 2.0 billionWhat is the NPV of the electric scooter project? (Negative amount should be indicated by a minus sign. Enter your answer in billions. Do not round intermediate calculations. Round your answer to 2 decimal places.)Net present value ? ______________ billion

 

Paper#49188 | Written in 18-Jul-2015

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