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Author Question: What is the payback period for the Boeing 787 Dreamliner project? The Boeing 787-8 can carry 230 ... (Read 140 times)

LCritchfi

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What is the payback period for 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 of its final assembly plant in Everett Washington in December 2007 at a total cost of $7B. Boeing has secured sales of 865 aircraft over the period 2008-2012 for total proceeds of $138.4B ($160M per aircraft). The cost of building each plane is $140M. Assume that sales (and costs) occur in December of each year. Assume that sales are spread evenly across the five years from 2008-2012. The project cash flows are shown in the table, below. What is the payback period for the project? Ignore taxes. 

YearCapital InvestmentAnnual SalesAnnual RevenuesAnnual CostsCash Flows
2007-$7,000M-$7,000
2008173$27,680$24,220$3,460
2009173$27,680$24,220$3,460
2010173$27,680$24,220$3,460
2011173$27,680$24,220$3,460
2012173$27,680$24,220$3,460

◦ 2 months
◦ 2.02 years
◦ 3.4 years
◦ 7 years
◦ 24 years


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Marked as best answer by LCritchfi on Apr 25, 2021

prumorgan

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LCritchfi

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Reply 2 on: Apr 25, 2021
Excellent


Dominic

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Reply 3 on: Yesterday
Wow, this really help

 

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