Question
Determine the number of planes that the company must produce in order to break even, on both accounting basis and NPV basis assuming 6years as
Determine the number of planes that the company must produce in order to break even, on both accounting basis and NPV basis assuming 6years as life of project. The project initial investment is $900 million, each plane sold for $15.5 million, the variable cost is $8 million each plane, the fixed cost is $150 million, the depreciation uses straight-line method, tax rate is 40% and the company’s cost of capital is 10%. Please explain work as much as possible.
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John E Freunds Mathematical Statistics With Applications
Authors: Irwin Miller, Marylees Miller
8th Edition
978-0321807090, 032180709X, 978-0134995373
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