Question: Kindly answer this question with clear steps using words, do not use excel.. Given the forecasted data, determine the number of planes that the company
Kindly answer this question with clear steps using words, do not use excel..
Given the forecasted data, determine the number of planes that the company must produce in order to break even, on both accounting basis and NPV basis. The 12-year project initial investment is $1,000 million, each plane sold for $12.5 million, the variable cost is $7 million each plane, the fixed cost is $100 million, the depreciation uses straight-line method, tax rate is 35% and the companys cost of capital is 10%. Please calculate accounting break-even and economic break-even for the project.
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