2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Investment
R&D Exp. 1100 2200 2200 2200 1320 880 660 440
Cap. Ex. 0 250 350 350 50 0 0 0 100 100 100 100 100
Ch. NWC 0 150 300 300 200 50 0 0

Cash Flows

Price per plane 216 220 225 229 234 238 243 248
Number of planes sold 20 35 50 50 50 50 50 50
Revenues 4320 7711 11236 11461 11690 11924 12163 12406
Operating Profit 648 1349 2247 2292 2338 2385 2433 2481
Depr. 25 60 95 100 100 100 100 110 120 130 115
R&D Exp. 1100 2200 2200 2200 1320 880 660 440
EBT (1,100) (2,200) (2,225) (2,260) (1,415) (332) 589 1,707 2,192 2,228 2,265 2,303 2,366
Taxes (418) (836) (846) (859) (538) (126) 224 649 833 847 861 875 899
NI (682) (1,364) (1,380) (1,401) (877) (206) 365 1,059 1,359 1,381 1,404 1,428 1,467

Depr. 25 60 95 100 100 100 100 110 120 130 115

Cap. Ex. 0 250 350 350 50 0 0 0 100 100 100 100 100
Ch. NWC 0 150 300 300 200 50 0 0 0 0 0 0 0

FCF (682) (1,764) (2,005) (1,991) (1,032) (156) 465 1,159 1,359 1,391 1,424 1,458 1,482
NPV (w/oTV) ($825)
Terminal Value
Disc. TV $2,106
NPV $1,281

Discount rate 11.04%

Operating Margin 15% 17.50% 20% 20% 20% 20% 20% 20%
Growth (inflation) 2%
Tax rate 38%
Planes sold 2008 on 50

FCF w/ TV (682) (1,764) (2,005) (1,991) (1,032) (156) 465 1,159 1,359 1,391 1,424 1,458 1,482
IRR 13.13%
 2014 2015 2016 2017 2018 2019

100 100 100 100 100 100

253 258 263 269 274 279

:
50 50 50 50 50 50 655 Total planes and close to
12654 12907 13165 13428 13697 13971 Boeing estimate and close
2531 2581 2633 2686 2739 2794 to 735 planes from
independent estimate
90 65 70 80 90 100 If demand exceeds 655,
build a second line but it is
2,441 2,516 2,563 2,606 2,649 2,694 cheaper
927 956 974 990 1,007 1,024
1,513 1,560 1,589 1,616 1,643 1,670

90 65 70 80 90 100
100 100 100 100 100 100
0 0 0 0 0 0

1,503 1,525 1,559 1,596 1,633 1,670

15,399 13

20% 20% 20% 20% 20% 20%

1,503 1,525 1,559 1,596 1,633 17,069