Question
What is the NPV of the Boeing 787 Dreamliner project? The Boeing 787-8 can carry 230 passengers up to 8,200 nautical miles at a cruising
What is the NPV of the Boeing 787 Dreamliner project? The Boeing 787-8 can carry 230 passengers up to 8,200 nautical miles at a cruising speed of mach 0.85. The Dreamliner is more comfortable for passengers because of higher cabin humidity. Boeing completed construction on its final assembly plant at time t = 0 for a total cost of $7B. Boeing has secured orders for 865 aircraft over the next five years (t = 1 to t = 5) for total proceeds of $138.4B ($160M per aircraft). The cost of building each plane is $140M. Assume that cash flows (sales and costs) occur at the end of each year starting one year after the assembly plant was completed. The project cash flows are shown in the table, below. What is the NPV of the project if Boeing's cost of capital is 10%? Calculate the NPV as of time t=0. (Round answer to the nearest million). $6,116M $8,069M $8,780M $8,967M $13,116M
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