An automobile manufacturer is developing a new electric vehicle. The development cost is $100 million to be depreciated
Posted: Mon Nov 15, 2021 5:18 pm
An automobile manufacturer is developing a new electric vehicle.
The development cost is $100 million to be depreciated straight
line over 5 years. The fixed costs will be $25 million annually.
The variable costs will be $20 thousand per vehicle. The
opportunity cost of capital is 10%, and the tax rate is 20%. The
Marketing Department has proposed a retail list price of $60
thousand per car. How many vehicles must the company sell annually
to breakeven from a cash flow (NPV) perspective? Please show
work
The development cost is $100 million to be depreciated straight
line over 5 years. The fixed costs will be $25 million annually.
The variable costs will be $20 thousand per vehicle. The
opportunity cost of capital is 10%, and the tax rate is 20%. The
Marketing Department has proposed a retail list price of $60
thousand per car. How many vehicles must the company sell annually
to breakeven from a cash flow (NPV) perspective? Please show
work