Provide a brief overview of relevant issues and summarize your recommendations. In early 2003, Boeing announced its intention to develop a new aircraft (7E7 and 7E7 Stretch) in a market facing great pressure. on profits. The decline of the airline industry has been attributed largely to the Iraq War, international terrorism and fear of the spread of SARS. The development of this new aircraft could potentially pull Boeing out of its innovation crisis and potentially give it an advantage in the mid-size aircraft market. Since 1994, Boeing had not put a new plane into production and failed to follow through on two commercial projects. aeronautical programs. The company desperately needed an aircraft that would distinguish it from Airbus, its main competitor and market leader. Boeing's vision for the 7E7 was a cost-effective aircraft that burned less fuel, had lower operating costs and flexibility for short or long haul routes. The new plane would be made with cheaper composite parts, reducing production time from 20 days to 3 days. The new project encountered some concerns. Profitability relied on the use of composite materials which had not won the trust of regulators. Boeing would also have to design completely new production methods for this new aircraft. Unfortunately, Boeing has problems with its production methods and delivering planes on time. The board also expected that development cost estimates would be significantly reduced before approving such a product. The market demand was for cheaper and more efficient aircraft, and this ideology had to be part of Boeing's development strategy. Airbus, the market leader, produced aircraft to serve the short, medium and medium paper segments. .....R and was found favorable. Assuming the numbers used to calculate WACC and IRR are accurate or conservative, the 7E7 project should be successful if risk factors are effectively controlled by Boeing. However, the most important factor in determining whether or not a project should move forward is the NPV of the project. If the project has a positive NPV, then the project should generally move forward. For the Boeing 7E7 project, the NPV is $5,266,550,000 using the cash flow data provided through 2037. The NPV is based on the assumption that the forecasted cash flows for the 7E7 project are accurate. According to NPV, Boeing is expected to move forward with the project because it will add value to the stock based on the data collected, with no indication that the 7E7 project will interfere with other projects already in progress or potential projects to be planned. the study..