The Airbus A220 has the following investments in R&D (in millions, all negative cash flows):

Year 1: $400M

Year 2: $350M

Each plane will be sold for $18.5M - 25% down and 75% due on delivery one year later. The cost to produce each plane is $14M - these costs are recognized on delivery. The Sales and Marketing Department says that you will sell 22 planes (year 3), 32 planes (year 4), 52 planes/year (years 5-9), and 77 planes (year 10).

What are the NPV (as of the beginning of year 1) AND the IRR of the A220 using an 11% discount rate?

Sale price (M$) per plane Down payment (%) Cost per plane (M$) Discount rate Years 1 2 3 5 7 10 11 # of planes sold Investment Revenues Production Costs Cash Flow NPV IRR