5. The Airbus A220 has the following R&D costs (all negative cash flows); 300M (year 1) 200M (year 2) 100M (year 3) Each plane will be sold for 45M - 20% down and the rest due on delivery one year later. The cost to produce each plane is 35M - these costs are recognized on delivery Sales says that you will sell 35 planes (year 4), growing by 5 planes per year. The last sale is made in year 10, when it is replaced by a new model What are the NPV (as of the beginning of year 1) and the IRR of the plane using a 10% discount rate? 14 B D E F G H K 1 M Years 6 2 3 4 6 5 A Sale price (M euros) plane 2 Down payment (%) 3 Cost per plane (M euros) 4 Discount rate 5 (in Million euros) 7 of planes sold & Investments on R&D 9 Revenues 10 Production Costs 11 Cash Flows 12 NPV 13 TRR 14 7 8 10 11