In an Effort to Capture the Large Jet Market, Hiro

question 36

Multiple Choice

In an effort to capture the large jet market, Hiro Airplanes invested $11.264 billion developing its B490, which is capable of carrying 840 passengers. The plane has a list price of $276.5 million. In discussing the plane, Hiro Airplanes stated that the company would break even when 253 B490s were sold. Assume the break-even sales figure given is the cash flow break-even. Suppose the sales of the B490 last for only 12 years. How many airplanes must Hiro sell per year to provide its shareholders a rate of return of 17 percent on this investment?

• A) 50.17
• B) 52.48
• C) 50.72
• D) 53.10
• E) 54.40

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Definitions:

Ionic Compound

A chemical compound composed of ions held together by electrostatic forces termed ionic bonding, generally formed between metal and non-metal ions.

Calcium

A soft gray alkaline earth metal, symbol Ca, essential for living organisms, particularly in cell physiology and bone formation.

Oxygen

Oxygen, a diatomic gas with the molecular formula O2, is critical for respiration in living organisms and supports combustion.

Ionic Compound

A chemical compound formed by the transfer of electrons from one atom to another, resulting in the formation of positively and negatively charged ions.