Using the spreadsheet, calculate the NPV of VLCT Project to Airbus if it builds the VLCT and Boeing does not.

ONLY MODIFY THE YELLOW CELLS!

assumptions:

Price per plane = $220m (add 2% inflation each year, midpoint of projected range from case)

Expected planes sold per year = 30 (just above analyst forecast of 25, below 747 average of 35/year)

Operating margin = 20% (less than 747's margin of 25% because of expected price competition)

Development cost = $12.5 Bn total (spread over 5 years of development, midway between $5 Bn and $20 Bn, pp. 3-4 of case)