Question

Given the forecasted data, determine the number of planes that the company must produce in order to break even, on both accounting basis and npv basis. The 10-year project initial investment is 1,000 million, each plane sold for 15 million, the variable cost is 7 million each plane, the fixed cost is 150 million, the depreciation is the straight-line method, tax rate is 40% and the company's cost of capital is 12%. please show all work.

Answer #1

Given the following forecasted data, determine the number of
planes that the company must produce in order to break even, on
both accounting basis and NPV basis assuming 6years as life of
project. The project initial investment is $900 million, each plane
sold for $15.5 million, the variable cost is $8 million each plane,
the fixed cost is $150 million, the depreciation uses straight-line
method, tax rate is 40% and the company’s cost of capital is 10%.
Please explain work...

Given the following forecasted data, determine the number of
planes that the company must produce in order to break even, on
both accounting basis and NPV basis assuming 6years as life of
project.
the project initial investment is $900 million, each plane sold
for $15.5 million, the variable cost is $8 million each plane, the
fixed cost is $150 million, the depreciation uses straight-line
method, tax rate is 40% and the company’s cost of capital is
10%.
Please explain work...

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