Read the folllowing 19 points of information and present an itemised breakdown (and the total) for the cash flows at the start of the period.

1. QANTA paid $50,000 to beckham and co to investigate demand for dream flyer planes

2. QANTA paid 50 million to Boeiing. CEO travel receipt of $15,000 recorded as opportunity cost

3. QANTA purchased 3 dream flyer planes today for 300 million each, will be funded using a 60/40% split between debt and cash respectively (debt from commonwealth bank) the principal and interest repayments on the ten-year amortising loan will total $65 million per annum

4. QANTA have purchased 3 airplane elevators from airbus at 5 million each

5. Promote new planes spending $20 million immediately and at the end of year 1 on its advertising campaign. Following on, advertising for the Dreamflyer planes will total $5 million annually. To partially fund these advertising expenses, whilst the Dreamflyer planes are in operation, Lionel and Diego decide to reduce the total annual advertising expenses associated with QANTAs existing fleet from $502 million to $500 million beginning at the end of year 1

6. Yearly sale $1000M(100% customer filled rate) 2 years time

- Sales decrease by 250M to 750M from year 2

-Expected to have 80% customer fill rate but this decrease is irrelevant.

7. Minor maintenance cost 2.8M/year

- Increase spare part inventory by 20m

8. Annual jet turbine fuel cost from 2800m to 3000m in year 1

- Cost expected to increase by 2% every following year.

9. Total salary is 5.80m/ year

- End of year 2 , increase pay by 5%

10. Operation expense 45m p.a for three of the A380 (services at airport)

-Forecast the same expense for the three Dreamflyer planes

11. Food and drink expenses totalled $1,000 million across all of its existing planes.

- Dreamflyer plane will require $4 million of food and drink annually.

- Introduction of the Dreamflyer planes marginally increases the bulk buying capacity of QANTA, resulting in total food and drink costs of $1,010 million p.a. across all planes (this figure includes food and drink costs for all of the Dreamflyer planes).

12. Additional comprehensive insurance for the new planes costing a total of $8 million per annum including 3 Dreamflyer planes.

- QANTA headquarters are operating at a cost of $5 million per annum. Dreamflyer project to be allocated an equal share of the QANTA headquarter operating costs, which is currently equally split between its entire fleet of 300 planes.

13. 3 rudders could be sold today for a combined total of $2 million, were purchased previously for a total of $5 million and have been written off for tax purposes.

- These rudders will be worthless by the conclusion of the Dreamflyer project.

14. QANTA will need to immediately train 15 pilots to fly the Dreamflyer planes. It will cost $50,000 to train each pilot.

15. QANTA Plans to sell dreamflyer in 10 years

- Dreamflyers need major maintenance every 3 years - 1 month to repair

- Maintenance costs are tax deductible

- Maintenance costs @ 2 million per plane, helps to keep planes value

- Cost paid over 3 years

- Will lease 3 comfortline planes for 1 month @ 4 million total while dreamflyer are being repaired.

- Sales, Food & Drink, Fuel expected to drop during repair month.

16. Purchased 2 Hangars & Office Space for 2 million from Ansett @ Huge Discount

-1 Hangar = 2 Dreamflyer planes

- Used for minor/major maintenance

- QANTA has 3 planes = 3 space

- Star Alliance Rents 1 Space @ 1 million per hangar

- Office Space is being rented by Singa Airlines @ 50000/annum with 20000 in utilities - paid by QANTA

- Office Space will be used for QANTA admin/call center regarding dreamflyer planes. 300000/year in salary

17. Taxation rule 2017/2 from ATO: Each dreamflyer = 20 year life

- Plane elevator: 5 year useful life

- Plane Rudder: 20% depreciation p.a.

- Operating Expenses are tax deductible in the year expenses are incurred.

- Tax Rate: 30% P.A.

18. International Air Transport Association (IATA) Estimates in 10 Years:

- Dreamflyer plane = 140 million

- Elevator = 1 million

19. Required Return on Dreamflyer Planes = 14% with regards to risk. Agreed by:

- Commonwealth Bank

- Beckham & Co

- QANTA accounting team