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.