Question

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 ¥15.1 billion. The cost of capital is 11%. 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			1.11	million
Market share			0.1
Unit price		¥	410,000
Unit variable cost		¥	370,000
Fixed cost		¥	2.01	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.)

Answer 1