Compute PV of investment cash flows using information (CAPM needed to compute discount rate; use...
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Finance
Compute PV of investment cash flows using information (CAPM needed to compute discount rate; use 6% as a risk premium). Use 10% of cumulative CapEx for depreciation each year.
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Exhibit 10 Airbus Development Expenditure by Year ($ millions) Investment 2001 2002 2003 2004 2005 2006 2007 2008 Total R&D Expenditure Capital Expenditures Working Capital Total $1,100 0 0 $2,200 250 150 $2,200 350 300 $2,200 350 300 $1,320 50 200 $880 0 $660 0 0 $440 0 0 $11,000 $1,000 $1,000 50 $1,100 $2,600 $2,850 $2,850 $1,570 $930 $660 $440 $13,000 Source: Dresdner Kleinwort Benson, Aerospace and Defense Report, May 8, 2000
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