(1) 5 pts This work must be your own. Reply on an Excel spreadsheet Ford Motor has been successfully producing the Ford Aspire in India. It has best-in-class safety features and has premium interiors. Designed to exude success, it’s been chosen the best car in India by several critics. Ford now wishes to extend the product into other parts of Asia and is considering producing the car in China. This will involve an initial investment of RMB 4 billion in year zero. The plant will start production in year one. The plant is then expected to produce cars for ten years. We can also assume a salvage value at the end, year 10, of RMB 500 million. The tax law there allows the use of the straight-line method over the ten years of cash flow to depreciate the original value to the salvage value. The plant will produce 80,000 cars per year. Ford assumes that it can sell the cars initially for RMB 65,000. Thereafter the selling price is expected to increase 4% per year. Auto production materials for each car are expected to be RMB 18,000 per vehicle in the initial production year and increase at 2% per year. Total labor costs for the plant are forecasted to cost RMB 1.1 billion and thereafter increase at 7% per year. Ford will rent the land on which the plant is built for RMB 300 million per year. The initial payment is upfront, in year zero, so this is a year zero expense through a year 10 expense. Ford’s cost of capital is 15%. Profits are taxed at 21%. (Remember that Ford is a big company with lots of ongoing operations. With all projects, it’s important to think on the margin. Ask what impact this has using that frame of reference. Tax is a great place to apply this thinking. Ford pays taxes as long as the entire firm is profitable, right? In a year when this project makes a profit, it creates an additional tax liability for Ford. What about in startup (or construction) years when this project creates a loss? will get it few hours before your set deadline. Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax..

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