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Otobai is considering still another production method for its electric scooter. It would require an investment of 15.45 billion in addition to the initial investment

Otobai is considering still another production method for its electric scooter. It would require an investment of 15.45 billion in addition to the initial investment of 15.45 billion but would reduce variable costs by 49,000 per unit. The cost of capital was assumed to be 13%. The total investment can be depreciated on a straight-line basis over the 10-year period, and profits are taxed at a rate of 50%.

Consider the following estimates for the scooter project.

Market size 1.09 million
Market share .1
Unit price 420,000.0
Unit variable cost 345,000.0
Fixed cost 3.09

billion

Assume investment is depreciated over 10 years straight-line and income is taxed at a rate of 50%.

a.

What is the NPV of this alternative scheme?(Do not round intermediate calculations. Enter your answer in billions. Round your answer to 2 decimal places.)

b.

Calculate the break-even point.(Do not round intermediate calculations. Round "PV Factor" to 6 decimal places and the finalanswer to the nearest whole number.)

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