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Author Question: What is the Profitability Index of the Boeing 787 Dreamliner project? The Boeing 787-8 can carry 230 ... (Read 116 times)

james0929

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on: Apr 25, 2021
What is the Profitability Index 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 its 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 Profitability Index of the project if Boeing's cost of capital is 10%? Calculate the index as of December 1, 2007. Ignore taxes.

YearCapital InvestmentAnnual SalesAnnual RevenuesAnnual CostsCash Flows
2007-$7,000M​​​-$7,000
2008​173$27,680$24,220$3,460
2009​173$27,680$24,220$3,460
2010​173$27,680$24,220$3,460
2011​173$27,680$24,220$3,460
2012​173$27,680$24,220$3,460

◦ -1.52
◦ -0.44
◦ 1.06
◦ 1.87
◦ 2.43
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by james0929 on Apr 25, 2021

Melissahxx

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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james0929

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Reply 2 on: Apr 25, 2021
Thanks for the timely response, appreciate it

komodo7

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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