Objectives The objectives of The Boeing 7E7 case study is to seek the answer for the project question. Why is Boeing contemplating the launch of the 7E7 project? Is this the good time to do so? How would we know if the 7E7 project will create value? How to estimate the WACC? Is there anything else the board of directors should consider in assessing the financial appeal of this project? Why might the board vote ’yes’ on the 7E7‚ when the cost of capital estimate is greater than
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Q1. I started with picking up a relevant risk-free rate (Rfr) for the CAPM to calculate the cost of equity; I learned that 10 years T-Bond rate was more appropriate rate to be utilized for the sake of Rfr; the reasons cited in the reading “Best Practices in Estimating the Cost of Capital: Survey and Synthesis” made sense that the long-term bond yields more diligently replicates the default free HPR available on long term investments and hence more closely reflects the different investing decisions
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The Boeing 7E7 WACC Estimation In order to evaluate the prospective IRRs from the Boeing 7E7‚ we first try to estimate an appropriate required rate of return for accepting this project. The capital asset pricing model is applied to estimate the cost of equity of the commercial aircraft division: R_EC= β_EC*(R_M-R_f )+R_f where REC is the cost of equity capital of the commercial aircraft division. βEC is the beta for the commercial division of Boeing. This beta is used instead of the company’s
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Course INTERNATIONAL MANAGEMNT FOR INNOVATION AND GROWTH (BG 007) ANALYSIS REPORT ON STUDY OF EMERGENCE OF EMIRATES AS A GLOBAL AIRLINE
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QANTAS ANNOUNCES PROFIT RESULT‚ RESPONSE TO ECONOMIC CONDITIONS Highlights: Strong portfolio performance: o Continuing record results for Jetstar and Qantas Frequent Flyer.1 o Revenue growth of 6 per cent. o Yield and unit cost improvements. o Offset by industrial action and record high fuel costs. Improvement in net operating cash flow of 5 per cent. Strategic initiatives to transform Qantas International and grow Jetstar in Asia. SYDNEY‚ 16 February 2012: The Qantas Group today announced
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market that will give them a competitive edge over other competitors. The process is called PESTLE analysis‚ a tool which plays a vital role in the framework of the organization identifies various macro environmental factors to assess what their potential impact on the organization can be‚ enabling the organization to apply strategic changes for effective future operations and industry analysis. The PESTLE analysis factors are Political‚ Economic‚ Sociological‚
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mission of "becoming the most favorite airlines for both customers and employees 2. What is its current strategy? Currently‚ China Southern operates more than 460 passenger and cargo transport aircraft‚ including Boeing 777‚ 747‚ 757 & 737 and Airbus A380‚ 330‚ 321‚ 320‚ 319. The airline fleet is ranked among the world’s top six airlines (in terms of fleet size) and with Guangzhou and Beijing as its central hubs‚ the carrier boasts a substantial route network spanning more than 150 destinations
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Contents | | Page NO | 1. | Introduction /National Domestic Flights | 5- 6 | 2. | International Flights | 7 | 3. | Form of Air travel Vehicles | 7-9 | 4. | Breif History abput Air Planes | 10 | 5. | Current Air Travel | 11-13 | 6. | The 2 main Aircraft Producers To The World | 14 | 7. | The World Largest Passenger Aircraft | 15 | 8. | Advantages of Air Travel | 16-20 | 9. | Disadvantages of Air travel | 21-26 | 10. | Notable Incidents
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to airline industry 2) Drivers of globalisation using yip’s model 2.1 Market globalisation 2.2 Cost globalisation 2.3 Globalisation of government policies 2.4 Globalisation of competition 3) Localisation- arguments against globalisation 4) Pestle Analysis 5) Porter’s 5 forces analysis and their application to Airline industry 5.1 Rivalry amongst Existing Firms 5.2 Threat of substitution 5.3 Threat of new entrants 5.4 Power of customers 5.5 Power of buyers 6) Opportunities and Threats
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in Dubai International Airport. It was established by the government of Dubai in the 25th of May 1985 with two leased aircrafts a Boeing 737-300 and an Airbus A300 operating its flights to Karachi‚ Mumbai and later Delhi. As of November 2007‚ Emirates Airlines has a fleet of more than 96 aircrafts that consists of 21 Airbus A330-series‚ 18 Airbus A340-series and 57 Boeing 777-series which makes it the Middle East’s largest airline flying to 97 different destinations in 61 countries all over the globe
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