5. The Airbus A230 has the following investments in R&D (in millions, all negative cash flows): $150M (year 1) $250M (year 2) $300M (year 3) Each plane will be sold for $24.5M - 10% down and the rest due on delivery two years later. The cost to produce each plane is $21M - these costs are recognized on delivery. The Sales and Marketing Department says that you will sell 25 planes (year 4), 30 planes (year 5), 50 planes/year (years 6-9), and 55 planes (year 10). What are the NPV (as of the beginning of year 1) and the IRR of the plane using a 6.6% discount rate? Sale price (M$) per plane Down payment (%) Cost per plane (M$) Discount rate 24.5 10.0% 21.0 6.6% Years 6 1 3 4 7 8 2 10 11 12 150 250 300 61 74 1.225 1.225 1.225 1,225 1,237 1,103 1.213 (in Million $) # of planes sold Investment Revenues Production Costs Cash Flow NPV IRR (150) (250) (300)