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1. Volkswagen wants to set up a new factory that will incur the following costs for the next 5 years- a. Initial Start Up Cost-$5
1. Volkswagen wants to set up a new factory that will incur the following costs for the next 5 years- a. Initial Start Up Cost-$5 million b. Yearly costs- $20 per unit (Est. units/year are 200,000) C. WACC - 13% 2. Create a slide detailing your net present value calculations that will be presented to the VP of Sales. Prepare a separate slide with a sensitivity analysis for the following estimated units. How will this variability in units change your decision making? a. 10% chance the factory produces 120% of estimation b. 60% chance the factory produces 100% of estimation c. 30% chance the factory produces 80% of estimation
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