I am working through a finance question, and would like to have someone check my calculations/provide feedback to my solutions. The problem is.

Option 2: hybrid model SUV Hybrid The second option is to produce a hybrid electric car. The hybrid option reflects the concerns raised by some older members of the production team about moving to a fully electric model. These experienced mechanics argued that the company's expertise is in producing conventional vehicles, and this should not be abandoned by switching to the production of fully electric vehicles. The production line of the hybrid model will require a lower initial investment than the electric model. Also, since a great part of the hybrid model's technology will be based on the conventional combustion engine, there is no need for staff training. Although estimated to be higher than conventional cars, the year-on-year growth in the sales of hybrid cars is expected to be lower than electric cars. The price of the Hybrid model is lower than the Electric model as it reflects the lower production costs and the market price of similar models. The profit made from the production and sale of hybrid cars is not subject to tax incentives. The investment in the production line equipment will be fully depreciated by the end of the project using the straight-line method. The team has produced the following projections for the hybrid model (SUV Hybrid). Table 2: Projections for the hybrid model (SUV Hybrid) Projected sales and costs Total Expected sales in units of the SUV Hybrid in Year 1 12,000 Year-on-year change in sales 1% Selling price per unit of the SUV Hybrid 31,000 Cost per unit of the SUV Hybrid: Labour 8% Material 50% Hybrid technology 10% Annual maintenance of production equipment 100,000 Investment in production line 410,000,000 Working capital required in year 0 and recovered at the end of the project in year 5 15,000,000 Standard corporation tax rate The tax is paid in cash in the year that the profit is recorded. 20% Cost of capital 13% Duration of the project 5 years

Questions to be answered: 1) Calculate for both models: a) the Net Present Value (NPV) and the Internal Rate of Return (IRR) Present your workings in full and show as a minimum the following: Sales revenue per year Gross profit per year Operating profit per year Net profit per year Total net cash flows per year Present Value of cash flows per year NPV and IRR b) the Payback Period for each of the two car models. Present your workings in full and show as a minimum the following: Sales revenue per year Gross profit per year Operating profit per year Net profit per year Total net cash flows per year Cumulative cash flows per year PP in years and months

My solutions.

Option 2 - Hybrid Model
Year	0	1	2	3	4	5
Sales Revenue		372,000,000.00	375,720,000.00	379,477,200.00	383,271,972.00	387,104,691.72
COSTS:
Labor 8%		(29,760,000.00)	(30,057,600.00)	(30,358,176.00)	(30,661,757.76)	(30,968,375.34)
Material 50%		(186,000,000.00)	(187,860,000.00)	(189,738,600.00)	(191,635,986.00)	(193,552,345.86)
Battery 10%		(37,200,000.00)	(37,572,000.00)	(37,947,720.00)	(38,327,197.20)	(38,710,469.17)
Total VC:		(252,960,000.00)	(255,489,600.00)	(258,044,496.00)	(260,624,940.96)	(263,231,190.37)
Gross Profit		119,040,000.00	120,230,400.00	121,432,704.00	122,647,031.04	123,873,501.35
Fixed Costs:
Maintenance		(100,000.00)	(100,000.00)	(100,000.00)	(100,000.00)	(100,000.00)
Depreciation		(82,000,000.00)	(82,000,000.00)	(82,000,000.00)	(82,000,000.00)	(82,000,000.00)
Operating Profit	0.00	36,940,000.00	38,130,400.00	39,332,704.00	40,547,031.04	41,773,501.35
Tax Rate	0.20	0.20	0.20	0.20	0.20	0.20
Tax Expense		(7,388,000.00)	(7,626,080.00)	(7,866,540.80)	(8,109,406.21)	(8,354,700.27)
Net Profit		29,552,000.00	30,504,320.00	31,466,163.20	32,437,624.83	33,418,801.08
Depreciation		82,000,000.00	82,000,000.00	82,000,000.00	82,000,000.00	82,000,000.00
Production Line	(410,000,000.00)
Working Capital	(15,000,000.00)
Recovered						15,000,000.00
Total Net Cash Flow	(425,000,000.00)	111,552,000.00	112,504,320.00	113,466,163.20	114,437,624.83	115,418,801.08
Cost of Capital	0.13	0.13	0.13	0.13	0.13	0.13
PV of Cash Flows	(425,000,000.00)	98,718,584.07	88,107,385.07	78,637,742.82	70,186,738.46	62,644,701.09
NPV	(26,704,848.49)
IRR	-2%
Cumulative Cash Flow	(425,000,000.00)	(313,448,000.00)	(200,943,680.00)	(87,477,516.80)	26,960,108.03	142,378,909.11
Payback Period		1	2	3	4	5
Net Profit	(410,000,000.00)	(298,448,000.00)	(185,943,680.00)	(72,477,516.80)	41,960,108.03	157,378,909.11
	0.633	7.596
The payback period will be met in July of the fourth year.