Assume you are a struggling U.S. auto company and you hope to build a very inexpensive car for sale primarily in developing companies. The target sale price of the car is $7,000. The initial investment for production somewhere in the Far East is estimated to be $2,000,000,000. The companys cost of capital (required annual ROI) is 16%. If projections are correct, and 400,000 cars can be sold annually, what is the target production cost for this car?

$5,800

$5,550

$5,400

$5,150

$6,200