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Delta Air Lines, Inc. (DAL) is considering offering commerdal travel to space within the next ten years. Use the following estimates to answer the
Delta Air Lines, Inc. (DAL) is considering offering commerdal travel to space within the next ten years. Use the following estimates to answer the questions below and help Delta determine whether this will be a viable project to undertake. (All costs and prices in millions of $) Initial capital spending Initial NWC Pretax salvage value Tax rate Required return Unit sales Price sold (per unit) Variable cost (per unit) Fixed costs (per year) MACRS Schedule -year 555 555 50,000 2,200 5,500 31% 11% Year 1 Year 2 Year 3 Year 4 Year S 500 575 650 650 650 50 10 6,000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% estion 1-Complete the following pro forma income statement for Delta's new project. (8 points) Forma Income Statement enues able costs costs eciation (31%) come Year 1 Year 2 Year 3 Year 4 Year 5 + in 2- Complete the depreciation schedule below given the initial cost of the project and a 5-year MACRS Schedule. Then use the ending book calculate after-tax salvage value for the project. (5 points)
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