Reference no: EM13479061

In early 1990,Boeing Co. decided to gamble $4 billion to build a new long distance ,350-seat wide body airplane called the Boeing 777. The price tag for the 777, scheduled for delivery beginning in 1995,is about $120 million apiece. Assume that Boeings $4billion investment is made at the rate of 800million a year for the years 1990 through 1994 and that the present value of the tax write-off associated with these costs is 750 million. On the basis of estimated annual fixed costs of $100 million, variable production costs of $90 million apiece, a marginal corporate tax rate of 34% and the discount rate of %14, what is the break even quantity of annual unit sales over the Boeing 777 projected 15 year life? Assume that all cash inflows and outflows occur at the end of the year