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Boeing Airbus case study

Boeing Airbus case study - Jennifer DePuy Chris Knight...

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Jennifer DePuy 402469832 Chris Knight 203592705 Stella Lee 403657324 Boeing and Airbus Case Study 1. Analyses a. NPV analysis i. $198 million/plane and expected sales found in IRR section ii. Financing cost for loans value needed iii. Cost of R&D (direct cost) 1. 6-10% of annual sales 2. Need gross sales number for Airbus iv. Operating cost incurred by this particular project (includes labor) value needed v. Cost of materials value needed vi. Previous investment of $500 million excluded in IRR analysis because it is a sunk cost vii. Capital expenditures for new manufacturing equipment values needed b. Sensitivity Analysis i. Sensitivity analysis represents the impact that the variation of each margin has in determining which alternative is selected. ii. All metrics previously used in NPV analysis also used for sensitivity analysis. c. IRR i. Using results from NPV for previously mentioned metrics ii. Duration of development: 6 years (1999-2005) iii. Duration of manufacturing 1.
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