a) What is the change in net working capital for 2025 (in $ million)?

b) What is the NPV of the project (in $ million)?

Intro It is the end of 2020. You're a financial analyst working for Tesla Motors. The company is considering producing the new Model Y car and is predicting the following sales (in $ million). Assume all cash flows occur at the end of the year. A B C D E 2022 2023 2024 2025 130 169 202.8 223.08 | 2 | Sales COGS and SG&A are expected to add up to 70% of sales. After 2025, production will end and the factory will shut down. To start production at the beginning of 2022, Tesla has to invest $200 million now and $100 million in 2021 to build a new factory. After completion at the end of 2021, the factory can be depreciated straight to zero over 10 years. The factory is expected to be worth $100 million at the end of 2025. Net working capital consists mainly of inventory of car components, minus some current liabilities. Net working capital is expected to be always 15% of sales. Tesla has a beta of 1.5. Its target capital structure weight for equity is 90% and the expected return on the S&P 500 is 4.6%. The company also has $1.2 bn in outstanding bonds and an average yield on its bonds of 0.085. The yield on Treasury bills is 2%. Tesla's marginal tax rate is 32%