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What is the NPV of the electric scooter project

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Reference no: EM132517406

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 1.24 million

Market share .1

Unit price ¥540,000

Unit variable cost ¥500,000

Fixed cost ¥2.14 billion

Question 1: 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: EM132517406

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