The runaway leaders of the English league lined up Wednesday's clash with the Spanish champions by racing through the group stage, qualifying well before Christmas with a couple of games to spare. Sir Alex's men have since demonstrated their powers on the domestic stage, going 12 points clear of Manchester City in the table and marching into the last 16 of the FA Cup.
"Our team is capable of winning the Champions League," said Sir Alex at a pre-match press conference in Madrid. "There is a great spirit about the players.
"People keep saying we're not as good as past United teams but sometimes we get foggy impressions about the past and I do so myself at times.
"The reality is this team doesn't know when it's beaten which is a great quality.
"The acid test is tomorrow and we have to get through it if we are to win this trophy."
The United boss is buoyed not only by form, but by the fitness of his squad with Paul Scholes being the only notable absentee from the plane to Spain.
"I think it's a good time for us to be playing Real Madrid," said Sir Alex. "We have a fantastic lead in our league and we have everyone fit. When you come to this part of the season you [often] have two or three players injured. We don't have that, which is a bonus.
"We're ready for tomorrow. Since the Champions League started, almost every year we have played one of the biggest clubs in the world.