Question
Tesla, a US car manufacturer, has a Chinese subsidiary Shanghai Tesla Super factory that manufactures and sells electric cars in China. a. The main input
Tesla, a US car manufacturer, has a Chinese subsidiary Shanghai Tesla Super factory that manufactures and sells electric cars in China.
a. The main input is priced in USD (USD10,000/unit)
b. All other costs are in CNY (Fixed cost=CNY 500 million, Variable cost= CNY50,000/unit).
c. Depreciation = CNY 1 million
d. S0 = CNY6.5/USD
e. Expects to sell 10,000 cars this year at CNY300,000 each.
f. Tax rate=30%; assuming tax credits are available for immediate use if losses occur
What are the operating cash flows in CNY?
What are the operating cash flows in USD?
How many units does Tesla need to sell to break even in operating cash flows in dollars?
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