The Airbus A220 has the following R&D costs (all negative cash flows): 600M (year 1) 500M (year 2) Each plane will be sold for 50M - 25% down and the rest due on delivery one year later. The cost to produce each plane is 44M - these costs are recognized on delivery. Sales says that you will sell 30 planes (year 4), growing by 15 planes per year. The last sale is made in year 12, when it is replaced by a new model. What are the NPV (as of the beginning of year 1) and the IRR of the plane using a 9% discount rate? 400M (year 3) 1 Sale price (M euros)/plane 2 Down payment (%) 3 Cost per plane (M euros) 4 Discount rate 5 6 7 # of planes sold 8 Investments on R&D 9 Revenues 10 Production Costs (in Million euros) 11 12 NPV 13 IRR 14 15 16 Cash Flows B 1 2 D 3 E 4 F 5 G 6 H Years 7 I 8 J 9 K 10 L 11 M 12 N 13 O