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What is the npv of the electric scooter project

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Reference no: EM132491557

Scenario analysis

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 ¥16.4 billion. The cost of capital is 8%. 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 1,240,000

Market Share 0.1

Unit price, yen 540,000

Unit variable cost, yen 500,000

Fixed cost, yen 2,140,000,000

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.

Reference no: EM132491557

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