Answer on the main questions with providing and EXCEL file with all calculations!
Capital Budgeting calculations
As concerns the economic viability of the Tri Star program, there are several interesting points to consider:5
• At planned (210 units) production levels, what was the true value of the Tri Star program?
• At a “break-even” production of roughly 300 units, did Lockheed really break even in value terms?
• At what sales volume did the Tri Star program reach true economic (as opposed to accounting) break-even?
• Was the decision to pursue the Tri Star program a reasonable one? What were the effects of this “project” on Lockheed shareholders?
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