• Amazon plans to expand its drone delivery service with the following financial details:
  • Initial Investment: $1.8 billion
  • Estimated Annual Revenue: $500 million
  • Operating Costs: $350 million annually
  • Depreciation Expense: $150 million annually
  • Tax Rate: 23%

• Requirements:
  1. Calculate the annual net income from the drone delivery service.
  2. Prepare a five-year financial projection.
  3. Analyze the payback period for the initial investment.
  4. Discuss the strategic benefits of the drone delivery service for Amazon’s logistics.
  5. Evaluate the risks and technological challenges of implementing the service.