• GM is considering a new manufacturing plant with the following financial implications:
  • Initial Investment: $1.5 billion
  • Estimated Annual Revenue: $500 million
  • Operating Costs: $300 million annually
  • Depreciation Expense: $50 million annually
  • Tax Rate: 25%

• Requirements:
  1. Calculate the annual net income from the new plant.
  2. Prepare a five-year income projection for the new plant.
  3. Analyze the payback period for the initial investment.
  4. Discuss the impact of the new plant on GM's overall financial strategy.
  5. Evaluate the risks associated with the new plant investment.