Discussion
A programme has fixed costs of \( 3.0 \) billion dollars and a margin of \( 12 \) million dollars per aircraft. The breakeven quantity is
Answer: B
Correct answer: 250 aircraft
Breakeven is the fixed cost divided by the margin each aircraft contributes:
\[ N_{BE} = \frac{3.0 \times 10^9}{12 \times 10^6} = 250\ \mathrm{aircraft} \]
Two hundred and fifty aircraft is a substantial commitment - for a large transport it may represent a decade of production - and until it is reached the programme has consumed cash without returning it. This is why launch orders and the credibility of the market forecast weigh so heavily in the decision to proceed.
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