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The following information relates to a steam-driven bicycle project. The fixed cost would not be incurred if the project does not go ahead.
The NPV of the project (use a 12% discount rate) to the nearest whole 1 million is Blank 1
DO NOT INCLUDE THE SIGN AND DO NOT INCLUDE COMMAS. For example, (125,000,000 should be included as 125).
Hint: the present value annuity factor at 12% for 10 years is 5.65.
Year 0 Investment -200 million
Years 1-10
Market size 1 million
Market share 0.4
Unit price 900
Unit variable cost 600
Fixed cost 30 million
Depreciation 5 million
Tax Rate 40%
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