Worksheet

Mkt Share Model

Explanation
Market Share Model used by other worksheets

Cashflow L-NL

Analysis of scenario where AIRBUS launches and

BOEING doesn't launch

Cashflow L-L

Analysis of scenario where AIRBUS launches and

BOEING launches

Cashflow NL-NL

Analysis of scenario where AIRBUS doesn't launch

and BOEING doesn't launch

Needs to be added by you

Cashflow NL-L

Analysis of scenario where AIRBUS doesn't launch

and BOEING launches

Needs to be added by you

Color Code for Cells

Dark Green
Light Green
Yellow
Red
Powder Blue
Assumptions
BOEING's Cost of Capital
AIRBUS' Cost of Capital
Growth Rate
Cost of First Unit
Slope of Learning Curve
Corporate Taxes
Depreciation
Demand over Twenty Year Forecast
Variable Cost

Basic Assumption of the model that are given

Basic Assumption of the model that YOU find
Pricing Cells - you'll want to vary these to find pricing strategies
Outcome Cells - NPV
Values you need to find and enter on this page

2%
15%
1%
-$500
80%
1%
S/L over 10 Years
20

FIND and Enter Here

FIND and Enter Here

FIND and Enter Here

FIND and Enter Here

If neither firm launches, assume a constant unit cost

for BOEING
If either launches, use learning curve calculation

AIRBUS' Capital Investment:

R&D Expenditure
Capital Expenditure
Working Capital

$6
$2
$2
$2

FIND and Enter Here

FIND and Enter Here
FIND and Enter Here

BOEING' Capital Investment:

R&D Expenditure
Capital Expenditure

$4
$2
$2

FIND and Enter Here

FIND and Enter Here

Be Sure to READ the comment Box's attached to cells throughout the spreadsheet (red triangles

Needs to be added by you

Needs to be added by you

pricing strategies

FIND and Enter Here

FIND and Enter Here

FIND and Enter Here

FIND and Enter Here

FIND and Enter Here

FIND and Enter Here
FIND and Enter Here

FIND and Enter Here

FIND and Enter Here

et (red triangles in corner of cells)

Market Share Model

Price ($Million)
Seats
Seats Adj. For Load Factor
Price/Seat ($ Million)
Operating Expense Factor
Revenue Per Seat Mile (Dollars)
Variable Cost Per Seat Mile
Fixed Cost Per Seat Mile
Operating Income Per Seat Mile

Pre-Launch
Airbus (L) / Boeing (NL)
Boeing 747
Airbus A3XX
Boeing 747
150 $
247.95 $
160.00
416
570
416
70%
291
399
291
0.36
0.44
0.38
100%
80%
100%
$0.116
$0.060
$0.045

$0.116
-0.060
-0.045
$0.011

$0.116
-0.048
-0.054
$0.014

$0.116
-0.060
-0.048
$0.008

Revenue Per Seat Mile

Variable Cost Per Seat Mile
Fixed Cost Per Seat Mile
Operating Margin Per Seat Mile

100%
-52%
-39%
9%

100%
-41%
-47%
12%

100%
-52%
-41%
7%

Market Share Forecast

Planes Produced by each Firm

100%
20

63%
13

37%
7

Demand Shift Parameter

Planes Produced by Industry

1
20

1
20

Airbus (L) / Boeing (L)

Airbus (NL) / Boeing (NL)
Airbus (NL) / Boeing (L)
Airbus A3XX
Boeing 747X
Airbus A3XX
Boeing 747
Airbus A3XX
Boeing 747X
$
238.45 $
177.00 $
$
150.00 $
$
150.00
570
520
NA
416
NA
520
399
364
NA
291
NA
364
0.42
0.34
NA
0.36
NA
0.29
80%
100%
NA
100%
NA
100%
$0.116
-0.048
-0.052
$0.016

$0.116
-0.060
-0.04248
$0.014

NA
NA
NA
NA

$0.116
-0.060
-0.045
$0.011

NA
NA
NA
NA

$0.116
-0.060
-0.036
$0.020

100%
-41%
-45%
14%

100%
-52%
-37%
12%

NA
NA
NA
NA

100%
-52%
-39%
9%

NA
NA
NA
NA

100%
-52%
-31%
17%

54%
11

46%
9
1
20

0%
0

100%
20
1
20

For these two Cases, you need

to make copies of cashflow sheets
Re-name and link accordingly

0%
0

100%
20
1
20

Assumptions

2001

2002

2003

2004

20
20

38

38

38

38

Total Industry Demand

Years of Forecast

($203) NPV
248.0 247.950736 247.95074 247.9507 247.9507
63%
0%
0%
0%
0%
0
0
0
0
0
0
0
0
0

AIRBUS
Price
Market Share (when A3XX is online)
Units Sold
Cumulative Production

$6,584 NPV
160.0
150
37%
100%
38
0
38

BOEING
Price
Market Share (when A3XX is online)
Units Sold
Cumulative Production

130
0.0226

Demand Parameter (Monopoly case)

AIRBUS - Launch

150
100%
38
114

150
100%
38
153

100%

100%

100%

(203.14) NPV

Sales Revenue
Price
Units sold
Revenue
Variable Cost
Variable Unit Cost
Total Variable Cost
SG&A
Depreciation

100%

150
100%
38
76

247.950736 247.95074 247.9507 247.9507

0
0
0
0
0
0
0
0

-$500
-0.3219
-3%
S/L 10 Years

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

38%

0
0

0
0

0
0

0
0

"Net Income"
Add Depreciation

0
0

0
0

0
0

0
0

Operating Cash Flow

Less Required Investment
R&D Expenditure
Capital Expenditure

-$2
-$2

Less Working Capital

-$2

$0
$0
-$1
$0

$0
$0
-$1
$0

$0
$0
-$1
$0

$0
$0
-$1
$0

-$1

-$1

-$1

-$1

EBIT
Less Taxes

Free Cashflow
Discount Rate

15%

Growth Rate
Terminal Value

1%

Total Free Cashflow

-$1

-$1

-$1

-$1

150
38
5719

150
38
5719

150
38
5719

150
38
5719

$0
-3%
S/L 10 Years

-115
-4385
0
-172
0

-115
-4385
0
-172
0

-115
-4385
0
-172
0

-115
-4385
0
-172
0

1%

1163
-12

1163
-12

1163
-12

1163
-12

1151
0

1151
0

1151
0

1151
0

1151
0

1151
0

1151
0

1151
0

1151

1151

1151

1151

1151

1151

1151

1151

NPV

BOEING - No Launch

($203)

6,583.85 NPV

Sales Revenue
Price
Units sold
Revenue
Variable Cost
Variable Unit Cost
Total Variable Cost
R&D Expenditure
SG&A
Depreciation
EBIT
Less Taxes

-115

"Net Income"
Add Depreciation
Operating Cash Flow
Less Capital Expenditure

$0

Free Cashflow
Discount Rate
Growth Rate (Inflation)
Terminal Value

2%
1%

Total Free Cashflow

NPV

$6,584

2005

2006

2007

2008

2009

2010

2011

2012

2013

38

247.95074 247.9507 247.9507 247.9507 247.9507 247.9507 247.95074 247.95074 247.95074

0%
63%
63%
63%
63%
63%
63%
63%
63%
0
1
1
1
1
1
1
1
1
0
1
1
2
3
3
4
4
5

150
100%
38
191

160.00
37%
0
191

160.00
37%
0
191

160.00
37%
0
192

160.00
37%
0
192

160.00
37%
0
192

160.00
37%
0
193

160.00
37%
0
193

160.00
37%
0
194

100%

93%

93%

93%

93%

93%

93%

93%

93%

247.95074 247.9507 247.9507 247.9507 247.9507 247.9507 247.95074 247.95074 247.95074

0
1
1
1
1
1
1
1
1
0
157
157
157
157
157
157
157
157

0
0
0
0

-725
-458
-5
0

-509
-321
-5
0

-432
-273
-5
0

-387
-245
-5
0

-357
-226
-5
0

-335
-211
-5
0

-317
-200
-5
0

-303
-191
-5
0

0
0

-306
116

-170
65

-121
46

-93
35

-74
28

-60
23

-49
19

-40
15

0
0

-190
0

-105
0

-75
0

-58
0

-46
0

-37
0

-30
0

-25
0

-189

-105

-75

-57

-46

-37

-30

-24

-$189

-$105

-$75

-$57

-$46

-$37

-$30

-$24

$0
$0
-$1
$0
-$1

-$1

-$189

-$105

-$75

-$57

-$46

-$37

-$30

-$24

150
38
5719

160
0
59

160
0
59

160
0
59

160
0
59

160
0
59

160
0
59

160
0
59

160
0
59

-115
-4385
0
-172
0

-115
-42

-115
-42

-115
-42

-115
-42

-115
-42

-115
-42

-115
-42

-115
-42

-2
0

-2
0

-2
0

-2
0

-2
0

-2
0

-2
0

-2
0

1163
-12

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

1151
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

1151
0

15

15

15

15

15

15

15

15

1151

15

15

15

15

15

15

15

15

1151

15

15

15

15

15

15

15

15

2014

2015

2016

2017

2018

2019

2020

247.95074 247.95074 247.95074 247.95074 247.95074 247.95074 247.95074

63%
63%
63%
63%
63%
63%
63%
1
1
1
1
1
1
1
6
6
7
8
8
9
9

160.00
37%
0
194

160.00
37%
0
194

160.00
37%
0
195

160.00
37%
0
195

160.00
37%
0
195

160.00
37%
0
196

160.00
37%
0
196

93%

93%

93%

93%

93%

93%

93%

247.95074 247.95074 247.95074 247.95074 247.95074 247.95074 247.95074

1
1
1
1
1
1
1
157
157
157
157
157
157
157

-291
-184
-5
0

-281
-177
-5
0

-272
-172
-5
0

-264
-167
-5
0

-257
-162
-5
0

-251
-158
-5
0

-245
-155
-5
0

-32
12

-25
10

-20
8

-15
6

-10
4

-7
2

-3
1

-20
0

-16
0

-12
0

-9
0

-6

-4

-2

-20

-16

-12

-9

-6

-4

-2

-$20

-$16

-$12

-$9

-$6

-$4

-$2

-13
-$20

-$16

-$12

-$9

-$6

-$4

-$15

160
0
59

160
0
59

160
0
59

160
0
59

160
0
59

160
0
59

160
0
59

-115
-42

-115
-42

-115
-42

-115
-42

-115
-42

-115
-42

-115
-42

-2
0

-2
0

-2
0

-2
0

-2
0

-2
0

-2
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15
0

15

15

15

15

15

15

15

15

15

15

15

15

15

15

1466
15

15

15

15

15

15

1481

Assumptions

2001

2002

2003

2004

20
20

38

38

38

38

Total Industry Demand

Years of Forecast
AIRBUS

($207) NPV
238.5 238.450571 238.45057 238.4506 238.4506
54%
0%
0%
0%
0%
0
0
0
0
0
0
0
0
0

Price
Market Share (when A3XX is online)
Units Sold
Cumulative Production

BOEING

$7,454 NPV
177.0
150
46%
100%
38
0
38

Price
Market Share (when A3XX is online)
Units Sold
Cumulative Production

115
0.018

Demand Parameters (Monopoly case)

(set AirBus price = 0)

AIRBUS - Launch

150
100%
38
114

150
100%
38
152

100%

100%

100%

(207.13)

Sales Revenue
Price
Units sold
Revenue
Variable Cost
Variable Unit Cost
Total Variable Cost
SG&A
Depreciation

100%

150
100%
38
76

238.450571 238.45057 238.4506 238.4506

0
0
0
0
0
0
0
0

-$500
-0.3219
-3%
S/L 10 Years

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

38%

0
0

0
0

0
0

0
0

"Net Income"
Add Depreciation

0
0

0
0

0
0

0
0

Operating Cash Flow

Less Required Investment
R&D Expenditure
Capital Expenditure

-$2
-$2

Less Working Capital

-$2

$0
$0
-$1
$0

$0
$0
-$1
$0

$0
$0
-$1
$0

$0
$0
-$1
$0

-$1

-$1

-$1

-$1

EBIT
Less Taxes

Free Cashflow
Discount Rate

15%

Growth Rate
Terminal Value

1%

Total Free Cashflow

NPV

BOEING - Launch

-$1

-$1

-$1

-$1

150
38
5707

150
38
5707

150
38
5707

150
38
5707

-$2
-3%
S/L 10 Years

-115
-4375
-0.4
-171
-0.04

-115
-4375
-0.4
-171
-0.08

-115
-4375
-0.4
-171
-0.12

-115
-4375
-0.4
-171
-0.16

1%

1160
-12

1160
-12

1160
-12

1160
-12

1148
0.04

1148
0.08

1148
0.12

1148
0.16

1148
-0.4

1148
-0.4

1148
-0.4

1148
-0.4

1148

1148

1148

1148

1148

1148

1148

1148

(207.13)

$7,454

Sales Revenue
Price
Units sold
Revenue
Variable Cost
Variable Unit Cost
Total Variable Cost
R&D Expenditure
SG&A
Depreciation
EBIT
Less Taxes

-115

"Net Income"
Add Depreciation
Operating Cash Flow
Less Capital Expenditure

-$2

Free Cashflow
Discount Rate
Growth Rate (Inflation)
Terminal Value

2%
1%

Total Free Cashflow

NPV

$7,454

2005

2006

2007

2008

2009

2010

2011

2012

2013

38

238.45057 238.4506 238.4506 238.4506 238.4506 238.4506 238.45057 238.45057 238.45057

0%
54%
54%
54%
54%
54%
54%
54%
54%
0
1
1
1
1
1
1
1
1
0
1
1
2
2
3
3
4
4

150
100%
38
190

177
46%
0
191

177
46%
0
191

177
46%
0
192

177
46%
0
192

177
46%
0
193

177
46%
0
193

177
46%
0
193

177
46%
0
194

100%

91%

91%

91%

91%

91%

91%

91%

91%

238.45057 238.4506 238.4506 238.4506 238.4506 238.4506 238.45057 238.45057 238.45057

0
1
1
1
1
1
1
1
1
0
128
128
128
128
128
128
128
128

0
0
0
0

-763
-411
-4
0

-535
-288
-4
0

-454
-245
-4
0

-408
-220
-4
0

-376
-203
-4
0

-352
-190
-4
0

-334
-180
-4
0

-319
-172
-4
0

0
0

-287
109

-164
62

-121
46

-95
36

-78
30

-66
25

-56
21

-47
18

0
0

-178
0

-102
0

-75
0

-59
0

-49
0

-41
0

-34
0

-29
0

-177

-101

-74

-59

-48

-40

-34

-29

-$177

-$101

-$74

-$59

-$48

-$40

-$34

-$29

$0
$0
-$1
$0
-$1

-$1

-$177

-$101

-$74

-$59

-$48

-$40

-$34

-$29

150
38
5707

177
0
82

177
0
82

177
0
82

177
0
82

177
0
82

177
0
82

177
0
82

177
0
82

-115
-4375
-0.4
-171
-0.2

-115
-53

-115
-53

-115
-53

-115
-53

-115
-53

-115
-53

-115
-53

-115
-53

-2
-0.2

-2
-0.2

-2
-0.2

-2
-0.2

-2
-0.2

-2
-0.16

-2
-0.12

-2
-0.08

1160
-12

26
0

26
0

26
0

26
0

26
0

26
0

26
0

26
0

1148
0.2

26
0.2

26
0.2

26
0.2

26
0.2

26
0.2

26
0.16

26
0.12

26
0.08

1148
-0.4

26

26

26

26

26

26

26

26

1148

26

26

26

26

26

26

26

26

1148

26

26

26

26

26

26

26

26

2014

2015

2016

2017

2018

2019

2020

238.45057 238.45057 238.45057 238.45057 238.45057 238.45057 238.45057

54%
54%
54%
54%
54%
54%
54%
1
1
1
1
1
1
1
5
5
6
6
7
8
8

177
46%
0
194

177
46%
0
195

177
46%
0
195

177
46%
0
196

177
46%
0
196

177
46%
0
197

177
46%
0
197

91%

91%

91%

91%

91%

91%

91%

238.45057 238.45057 238.45057 238.45057 238.45057 238.45057 238.45057

1
1
1
1
1
1
1
128
128
128
128
128
128
128

-306
-165
-4
0

-296
-159
-4
0

-286
-154
-4
0

-278
-150
-4
0

-271
-146
-4
0

-264
-142
-4
0

-258
-139
-4
0

-41
15

-35
13

-30
11

-25
10

-21
8

-18
7

-14
5

-25
0

-21
0

-18
0

-16
0

-13

-11

-9

-25

-21

-18

-16

-13

-11

-9

-$25

-$21

-$18

-$16

-$13

-$11

-$9

-64
-$25

-$21

-$18

-$16

-$13

-$11

-$73

177
0
82

177
0
82

177
0
82

177
0
82

177
0
82

177
0
82

177
0
82

-115
-53

-115
-53

-115
-53

-115
-53

-115
-53

-115
-53

-115
-53

-2
-0.04

-2
0

-2
0

-2
0

-2
0

-2
0

-2
0

26
0

26
0

26
0

26
0

26
0

26
0

26
0

26
0.04

26
0

26
0

26
0

26
0

26
0

26
0

26

26

26

26

26

26

26

26

26

26

26

26

26

26

2589
26

26

26

26

26

26

2615