Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I do not need an Excel solution, I need an understanding and then a solution on a piece of paper, then please, I need to

I do not need an Excel solution, I need an understanding and then a solution on a piece of paper, then please, I need to put all the numbers, please.
image text in transcribed
Q2) Tesla Inc. has a plan to add a new production line with useful life of 5 years. The project is expected to generate sales of 5 million cars for the following three years then the sales are expected to grow to 7 million over the next two years, the projected selling price per car is $50 thousand and it will remain constant over the 5 years. The projected variable costs are $20 thousand per car and the total fixed costs are $50 million. The project is expected to require net working capital of $100 million for the instalment period and then 20% of total sales for the 10 years of the project life. The Production line will cost $200 million, it will be depreciated using the straight-line method and to be sold at $10 million at the end of the project. If the relevant tax rate is 32%, find the following: 0) the projected income for the 5 years II) the operational cash flows for the 5 years III) the total cash flows for the 5 years IV) assuming discount rate of 10%, find the project NPV. V) Is the project worthy? Q2) Tesla Inc. has a plan to add a new production line with useful life of 5 years. The project is expected to generate sales of 5 million cars for the following three years then the sales are expected to grow to 7 million over the next two years, the projected selling price per car is $50 thousand and it will remain constant over the 5 years. The projected variable costs are $20 thousand per car and the total fixed costs are $50 million. The project is expected to require net working capital of $100 million for the instalment period and then 20% of total sales for the 10 years of the project life. The Production line will cost $200 million, it will be depreciated using the straight-line method and to be sold at $10 million at the end of the project. If the relevant tax rate is 32%, find the following: 0) the projected income for the 5 years II) the operational cash flows for the 5 years III) the total cash flows for the 5 years IV) assuming discount rate of 10%, find the project NPV. V) Is the project worthy

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Markets Investments And Financial Management

Authors: Daisy Scott

1st Edition

1639892001, 9781639892006

More Books

Students also viewed these Finance questions

Question

Degree to which the problem can be modularized

Answered: 1 week ago

Question

Do you set targets to reduce complaints?

Answered: 1 week ago