projected cash flows for Hughes was different from General Motors’ WACC‚ GM assumed that Hughes was of approximately the same risk as Lockheed or Northrop‚ which had low-risk defense contracts and products that were similar to those of Hughes. Specifically‚ assume the Hamada model of debt interest tax shields and the inputs in the table at right. Comparision firm GM Lockheed Northrop βE 1.20 0.90 0.85 D/E 0.40 0.90 0.70 Target D/E for acquisition of Hughes = 1 Hughes’s expected unlevered cash flow
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manufacture aircraft partsGE manufactures engines and Raytheon makes radar systemsbut nearly half of all aerospace dollars come from the defense market (Hoover’s). Lockheed Martin derives about 80 percent of its revenue from defense contracts with the U.S. government. Additionally‚ aerospace firms have large contracts with NASA. Lockheed and Boeing have agreements with NASA that equal 3 to 4 percent of their annual revenuethis includes the Space Shuttle‚ Satellite‚ Rocket‚ and other programs.
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Present Value (NPV). Each method encompasses positives and negatives; however if either are used without fully understanding what their prospective results reveal‚ mistakes can be made and under-estimations of return will happen. In a recent case Lockheed Martin chose to use the Internal Rate of Return to value their Tri Star project. We have determined this to be a mistake and‚ through this case analysis‚ will show where the mistake happened. We also intend to explain how using the Net Present Value
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F-22A Raptor development In 1990 Lockheed Martin‚ teamed with Boeing and General Dynamics. The first F-22 fighter aircraft was unveiled in April 1997 and was given the name Raptor. In September 2002‚ the USAF decided to redesignate the aircraft F/A-22 to reflect its multi-mission capability in ground attack as well as air-to-air roles. The aircraft’s design was changed again to F-22A when it achieved initial operating capability in December 2005. The decision to proceed to low-rate initial production
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age of 34‚ on the morning of May 20‚ 1932‚ Earhart set off fromHarbour Grace‚Newfoundland with the latest copy of a local newspaper (the dated copy was intended to confirm the date of the flight). She intended to fly to Paris in her single engine Lockheed Vega 5B to emulateCharles Lindbergh’s solo flight.[79][N 9] Her technical advisor for the flight was famed Norwegian Americanaviator Bernt Balchen who helped prepare her aircraft. He also played the role of "decoy" for the press as he was ostensibly
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(A) The payback is 35‚000/5‚000= 7 years Computation of the NPV : 15 NPV= -35‚000 + Σ 5‚000 / ( 1 + 12%)^ 15 i=1 NPV = $- 947. 67 Computation of the IRR : 15 0= -35‚000 + Σ 5‚000 / ( 1 + IRR)^ 15 i=1 IRR= 11.49% The NPV of this project is negative and the IRR is lower then the Cost of Capital (12%) Rainbow products shouldn’t go for
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Advanced Finance 1. Homework Investment Analysis 1. Question Rainbow Products Savings - $5000/year Machine costs $35.000 Expected to last for 15 years Cost of capital 12% A. payback?‚ NPV?‚ IRR? Payback: The amount of time required for a firm to recover its initial investment. by dividing the initial investment by the annual cash inflow. In our case $35.000/$5000= 7years NPV: Investment- the PV of its cash inflows discounted at a rate( the firm’s cost of capital)
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RoE will increase between 1990 and 2024. 2. First step of calculating cost of capital for 777 project is calculating Boeing’s levered beta. To calculate Boeing’s levered beta‚ we have to calculate unlevered betas of Grumman‚ Northrop‚ Lockheed and Lockheed then we have to take average of these betas. (0.369) Boeing’s levered beta is calculated as 0.373. Then we calculate Boeing’s commercial division beta which is 0.964. Then we calculate cost of equity (14.3%) and cost of debt (9.67%). Then finally
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Substitute Products/Services 17 5. Intensity of Rivalry among Competitors 18 6. Relative Power of other Stakeholders-Unions 18 COMPETITIVE POSITION OF MAJOR AEROSPACE COMPANIES 18 COMPETITOR ANALYSIS OF MAJOR AEROSPACE COMPANIES 20 Boeing Co. 20 Lockheed Martin Corporation 21 Northrop Grumman Corporation 23 Raytheon Co. 24 Other Manufacturers 25 Airbus 25 United Technologies 26 KEY SUCCESS FACTORS 26 Reducing Costs 26 Maintaining Access to Foreign Markets 27 INDUSTRY PROSPECTS AND
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it simple and safe"‚ "Keep it simple student"‚ "keep it simple‚ silly"‚ "keep it simple and sincere" or "keep it simple and secular."[5][6] Origin[edit] The acronym was reportedly coined by Kelly Johnson‚ lead engineer at the Lockheed Skunk Works (creators of the Lockheed U-2 and SR-71 Blackbird spy planes‚ among many others).[3] While popular usage has translated it for decades as‚ ’Keep it simple‚ stupid’‚ Johnson translated it as‚ ’Keep it simple stupid’ (no comma)‚ and this reading is still
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