In an effort to capture the large jet market, Wright Brothers Aviation invested $15 billion...
60.1K
Verified Solution
Link Copied!
Question
Accounting
In an effort to capture the large jet market, Wright Brothers Aviation invested $15 billion developing its 1903A, which is capable of carrying 800 passengers. The plane has a list price of $200 million. In discussing the plane, Wright Brothers Aviation stated that the company would break even when 200 1903As were sold. a. Assuming the break-even sales figure given is the accounting break-even, what is the cash flow per plane? (Enter your answer in dollars, not millions of dollars, and round your answer to the nearest whole dollar amount, e.g., 1,234,567.)
b. Wright Brothers Aviation promised its shareholders a return of 30 percent on the investment. If sales of the plane continue in perpetuity, how many planes must the company sell per year to deliver on this promise? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c. Suppose instead that the sales of the 1903A last for only 10 years. How many planes must Wright Brothers Aviation sell per year to deliver the same rate of return? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
