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Boeing Case Study

The Boeing Company is an international aerospace and defense corporation originally founded by William E. Boeing in Seattle, Washington. The international corporate headquarters are now located in Chicago, Illinois (Boeing, 2009).
Boeing was initially incorporated as Pacific Aero Products Company in 1916 (Boeing, 2009). Since 1916, Pacific Aero Products Company has transformed into Boeing and expanded into the largest global aircraft manufacturer by revenue, orders and deliveries, and the second largest aerospace and defense contractor in the world (Wikipedia, 2009). Boeing is the largest exporter in the United States and its stock is a component of the Dow Jones Industrial Average (Wikipedia, 2009).
Boeing currently employs more than 160,000 people across the United States and in 70 countries. This represents one of the most diverse, talented and innovative workforces anywhere. More than 38,800 employees hold college degrees, including nearly 29,000 advanced degrees, in virtually every business and technical field from approximately 2,800 colleges and universities worldwide (Boeing, 2009). The company leverages the talents of hundreds of thousands of skilled people worldwide.
In 2003, the Boeing Company began taking order for the 787 ‘Dreamliner.’ The 787 ‘Dreamliner’ was planned to be a mid-range jet with the capability to reach speeds matching the fastest wide-body, long-range planes, but with greatly improved fuel efficiency. Roughly half of the primary structure of the 787 was to be made of composite material, with the one-piece composite fuselage section contributing the greatest reduction in manufacturing costs (Britannica, 2009). This ‘Dreamliner’ was scheduled to begin commercial service in 2008.
In order to fully evaluate the ‘Dreamliner’ prospect obviously risks and costs must be compared with the benefits and revenues associated with production and sale of the model.
The Capital Assets Price Model (CAPM), originally developed in 1952...