Project #77981 - Finance

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 is 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  million  
  Market share     0.1    
  Unit price   ¥ 400,000.0    
  Unit variable cost   ¥ 360,000.0    
  Fixed cost   ¥ 2.0  billion  

   

What 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 ¥ - incorrect billion  

 

Subject Mathematics
Due By (Pacific Time) 08/01/2015 12:00 am
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