The Boeing Company has an opportunity to supply a large airplane to British Airways, a foreign airline. British Airways (BA) will pay $19 million upfront when the contract is signed and S19.45 million one year later. Two years after i.e. in the third year, British Airways deposited $9.7 million into Boeing business account. Boeing had obtained loan from Morgan Stanley (an investment bank) prior to the initial payment from BA and invest $16.5 million from it at the beginning of the project. Subsequently, Boeing spend S 20 million, $9.5 milon, S 3.5 million, 26 million, and 13 million as running cost for the first, second, third, fourth and fifth year respectively. British Airways will take delivery of the airplane during Year 4, and agrees to pay $26.25 million at the end of that year and the $15.5 million balance at the end of year 5. The outcome of the rate of return on this investment as compare with the minimum attractive rate of return (MARR) will determine if Boeing will continue to sustain their current staff strength or they will cede to the option of downsizing after the completion of the 5 year deal. Boeing management request her project management team to conduct an economic analysis on the proposed venture (project) so that they can be better informed on policy formulation in readine for any exigency that may result from the project. These exigencies include but not limited to staff downsizing, staff retainment, salary freezing, and salary cut or closing down some of their plants since they are multinational company. The project management team is planning to approach the task as follows Generate a table depicting the cash flow estimates for the Project Draw the cash flow diagram for the cash flow estimates Determine the number of rates of return values this project is likely to have Obtain the values for the rate of return using Microsoft Excel (Spreadsheet). These values should be obtain by plotting the Present worth against the range of rate of return values (0 % to 100 %, step increase of 5 %) Boeing management have set a MARR of 15% for any of their project, will you advised Boeing to embark on this project knowing the net positive cash flow received from British Airways is reinvested at 14%. The loan Boeing obtained from Morgan Stanley for the production of the Aircraft is borrowed at a rate of 10 % 1. 2. 3. 4. 5