As a manager at BMW, you are considering leasing a plant to build batteries for your...

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As a manager at BMW, you are considering leasing a plant to build batteries for your electric-powered BMW i3 vehicle. Suppose that BMW's current cost of batteries is $8,000 per car. You predict sales of 10,000 cars per year for this year and each of the following six years. If BMW leases the plant, you expect that the cost of batteries will be $7,800 per car. Suppose also that leasing the plant requires an immediate up-front lease payment of $10,000,000 but no further payments. At the end of the lease, BMW will turn the plant back to its owners. Assume that BMW will pay the cost of buying the batteries or of manufacturing them at the end of each year. If you use a discount rate of 5 percent, the net present value of producing these batteries internally is $ (Round your answer to two decimal places.) As a manager at BMW, you are considering leasing a plant to build batteries for your electric-powered BMW i3 vehicle. Suppose that BMW's current cost of batteries is $8,000 per car. You predict sales of 10,000 cars per year for this year and each of the following six years. If BMW leases the plant, you expect that the cost of batteries will be $7,800 per car. Suppose also that leasing the plant requires an immediate up-front lease payment of $10,000,000 but no further payments. At the end of the lease, BMW will turn the plant back to its owners. Assume that BMW will pay the cost of buying the batteries or of manufacturing them at the end of each year. If you use a discount rate of 5 percent, the net present value of producing these batteries internally is $ (Round your answer to two decimal places.)

Answer rating: 100% (QA)

Answer Costsaving due to inhouse production8000780010... View the full answer