Based on these assumptions, Airbus had a target pre-tax IRR of 15%, but thought the actual IRR might be as much as 20%.44 as reference points, yields on long-term U.S. government bonds were approximately 6.0%, inflation was 2.0%, and aircraft manufacturers like Boeing and Canada's Bombardier had asset betas of 0.84 for their commercial aviation divisions. In addition to the direct profits from the A3XX, there were other sources of potential value. Foremost among them was the fact that the A3XX would eliminate Boeing's monopolistic control of the VLA market and its ability to cross-subsidize smaller jets in its product line. According to the Dresdner Kleinwort Benson, this benefit could add an additional 1.5% to the project's IRR. A final, though smaller source of income would be the support services related to the sale, maintenance, and repair of planes. Exhibit 10 Airbus Development Expenditure by Year (5 millions) Investment 2001 2002 2003 2004 2005 2005 Total $1.100 200 2200 S440 RSD Expenditure Capital Expenditures Working Capital Total 200 1320 350 309 $250S1570 $11.000 $1.000 $1.000 $13.000 $1,100 52.600 $2.850 5440 Based on the diagram above - and the information provided. Please Compute PV of investment cash flows using information on page 8 and Exhibit 10 (CAPM needed to compute discount rate; use 6% as a risk premium). Use 10% of cumulative Capex for depreciation each year? ( Please show formulas Based on the diagram above - and the information provided. Please Compute PV of investment cash flows using information on page 8 and Exhibit 10 (CAPM needed to compute discount rate; use 6% as a risk premium). Use 10% of cumulative CapEx for depreciation each year? Please show formulas ) Exhibit 10 Airbus Development Expenditure by Year (5 millions) lavesten 2003 2004 2004 Total $1,100 $2.200 $2,200 $2,200 $1.320 $860 $440 R&D Expenditure Capital Expenditures Working Capital Total 200 $1,570 $11,000 $1,000 $1.000 $13,000 $1,100 $2,600 $2,850 $2,850 $660 440 ERRON a ncar pavement mm Balance Sheet Cash and ST Investments Total Assets Total Debt $3,730 55.469 22,04037,380 $4,420 38,024 $2,741 38,672 $3.554 36,147 732 Income Statement Sales Depreciation and amortization EBIT ket Value Number of Shares milions) ock Price year and Bond Rating Market Share (by Units) Deliver Based on these assumptions, Airbus had a target pre-tax IRR of 15%, but thought the actual IRR might be as much as 20%.44 as reference points, yields on long-term U.S. government bonds were approximately 6.0%, inflation was 2.0%, and aircraft manufacturers like Boeing and Canada's Bombardier had asset betas of 0.84 for their commercial aviation divisions. In addition to the direct profits from the A3XX, there were other sources of potential value. Foremost among them was the fact that the A3XX would eliminate Boeing's monopolistic control of the VLA market and its ability to cross-subsidize smaller jets in its product line. According to the Dresdner Kleinwort Benson, this benefit could add an additional 1.5% to the project's IRR. A final, though smaller source of income would be the support services related to the sale, maintenance, and repair of planes. Exhibit 10 Airbus Development Expenditure by Year (5 millions) Investment 2001 2002 2003 2004 2005 2005 Total $1.100 200 2200 S440 RSD Expenditure Capital Expenditures Working Capital Total 200 1320 350 309 $250S1570 $11.000 $1.000 $1.000 $13.000 $1,100 52.600 $2.850 5440 Based on the diagram above - and the information provided. Please Compute PV of investment cash flows using information on page 8 and Exhibit 10 (CAPM needed to compute discount rate; use 6% as a risk premium). Use 10% of cumulative Capex for depreciation each year? ( Please show formulas Based on the diagram above - and the information provided. Please Compute PV of investment cash flows using information on page 8 and Exhibit 10 (CAPM needed to compute discount rate; use 6% as a risk premium). Use 10% of cumulative CapEx for depreciation each year? Please show formulas ) Exhibit 10 Airbus Development Expenditure by Year (5 millions) lavesten 2003 2004 2004 Total $1,100 $2.200 $2,200 $2,200 $1.320 $860 $440 R&D Expenditure Capital Expenditures Working Capital Total 200 $1,570 $11,000 $1,000 $1.000 $13,000 $1,100 $2,600 $2,850 $2,850 $660 440 ERRON a ncar pavement mm Balance Sheet Cash and ST Investments Total Assets Total Debt $3,730 55.469 22,04037,380 $4,420 38,024 $2,741 38,672 $3.554 36,147 732 Income Statement Sales Depreciation and amortization EBIT ket Value Number of Shares milions) ock Price year and Bond Rating Market Share (by Units) Deliver