Question
Q. Suppose Apple is considering expanding its product line to include the new electric car, iCar. The move will require $20,000,000,000 to build new plants,
Q. Suppose Apple is considering expanding its product line to include the new electric car, iCar. The move will require $20,000,000,000 to build new plants, sales centers, and a nationwide sales team. The company estimates it will generate $300,000,000 in sales in the first 5 years, following by sales of $1,500,000,000 for 7 years, and $2,000,000,000 for 13 years. However, during each year operating costs will be 33% of sales. In addition, every 10 years the firm will need to spend $65,000,000 to update its facilities. If the firms required rate of return is 16.50%, what is the NPV of the project? Round to the nearest $0.01.
Note: Please show all work or write in complete sentences, if necessary. If you use the financial calculator to show your work, then please list the inputs you entered into the financial calculator.
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