Recently, a 10-year contract between Boeing Commercial Airplane Group (BCAG) and Thyssen Inc.—a distributor of raw aluminum—expired. The contract, valued at $300 million when initially signed, stemmed from Boeing’s desire in the late 1990s to reduce production bottlenecks resulting from supply shortages. Declines in the demand for commercial aircraft during the past decade led some analysts to challenge BCAG’s wisdom in signing such a long-term contract. Do you share this view? Explain
Recently, a 10-year contract between Boeing Commercial Airplane Group (BCAG) and Thyssen Inc.—a distributor of raw aluminum—expired. The contract, valued at $300 million when initially signed, stemmed from Boeing’s desire in the late 1990s to reduce production bottlenecks resulting from supply shortages. Declines in the demand for commercial aircraft during the past decade led some analysts to challenge BCAG’s wisdom in signing such a long-term contract. Do you share this view? Explain
Chapter17: Capital And Time
Section: Chapter Questions
Problem 17.6P
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Recently, a 10-year contract between Boeing Commercial Airplane Group
(BCAG) and Thyssen Inc.—a distributor of raw aluminum—expired. The
contract, valued at $300 million when initially signed, stemmed from
Boeing’s desire in the late 1990s to reduce production bottlenecks resulting
from supply shortages. Declines in the demand for commercial aircraft during
the past decade led some analysts to challenge BCAG’s wisdom in signing
such a long-term contract. Do you share this view? Explain
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