What is the npv of the electric scooter project

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Reference no: EM131886827

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 life of the project. Profits are taxed at a rate of 50%.

Consider the following project estimates:

Market size 1.1 million

Market share .1

Unit price ¥ 400,000

Unit variable cost ¥ 360,000

Fixed cost ¥ 2 billion

What is the NPV of the electric scooter project? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in billions rounded to 3 decimal places.)

Please list detailed steps on how to achieve answer.

Reference no: EM131886827

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