The assets and equipment needed

Initial cost $4000000

The prices and costs, we introduce eleven types of Hybrid cars, with an average price USD 30,000. With 100 car per year. Operating Cost will be 60% of the revenue.

The financing of the project (Capital structure) we will depend on 40% debt, and 60% equity. The life or duration of the project. Its an expanding project, not a new one. And we will put a plan for five years.

Initial Capital Outlay: The initial amount that should be paid at the start of the project = $ 4000000. If cost is 60% of the revenue. Assuming average selling price is $ 30,000 per car.

With 100 car per year.

Revenue = 30,000 X 100 = $3,000,000 per year.

Cost = 3,000,000 X 60% = 1,800,000 per year.

Calculate

The net present value and Internal rate of return for the Project