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5. The Airbus A220 has the following R&D costs (all negative cash flows): 400M (year 1) 300M (year 2) 200M (year 3) 100M (year 4)
5. The Airbus A220 has the following R&D costs (all negative cash flows): 400M (year 1) 300M (year 2) 200M (year 3) 100M (year 4) Each plane will be sold for 48M - 15% down and the rest due on delivery one year later. The cost to produce each plane is 38M - these costs are recognized on delivery. The Sales and Marketing Department says that you will sell 30 planes (year 5) and sale will grow by 5 planes per year before they plateau at 60 planes. The last sale is made in year 16, when the A220 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 9% discount rate
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