Homework Answers
| Ans. A 1 | Payback period = Initial investment / Annual cash inflows | ||
| First plane | $11,970,000 / $5,700,000 | 2.1 years | |
| Second plane | $33,440,000 / $8,800,000 | 3.8 years | |
| Ans. A 2 | Company should accept first plane as it has a lower payback period than plane | ||
| second which indicates that the company would recover its invested money in | |||
| less time. | |||
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Exercise 16-12 Determining the payback period LO 16-4 Zachary Airline Company is considering expanding its territory....
Exercise 16-12 Determining the payback period LO 16-4 Baird Airline Company is considering expanding its territory....
Exercise 16-12 Determining the payback period LO 16-4 Baird Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $23,800,000; it will enable the company to increase its annual cash inflow by $6,800,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $34,920,000; it will enable the company to increase...
Help Exercise 16-12 Determining the payback period LO 16-4 Adams Airline Company is considering expanding its...
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Baird airlines compa
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North airline company is considering expanding its territory. The company has the opportunity to purchase one...
North airline company is considering expanding its territory.
The company has the opportunity to purchase one of twoDifferent
used airplanes. The first airplane is expected to cost $12 million;
it will enable the company to increase its annual cash inflow by $4
million per year. The plane is expected to have a useful life of
five years and no salvage value. The second plane cost $24 million;
it will enable the company to increase annual cash flow by $6
million...
Stuart Airline Company is considering expanding its territory. The company has the opportunity to purchase one...
Stuart Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $12,190,000; it will enable the company to increase its annual cash inflow by $5,300,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $35,600,000; it will enable the company to increase annual cash flow by $8,900,000 per year. This...
Gibson Airline Company is considering expanding its territory. The company has the opportunity to purchase one...
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Check my Work Exercise 16-12 Determining the payback period LO 16-4 Benson Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $18,870,000; it will enable the company to increase its annual cash inflow by $5,100,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $43,240,000; it will enable the...
Baird airlines compa
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Rooney Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $22,230,000; it will enable the company to increase its annual cash inflow by $5,700,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs 40,500,000; it will enable the company to increase annual cash flow by $8,100,000 per year. This...
North airline company is considering expanding its territory.
The company has the opportunity to purchase one of twoDifferent
used airplanes. The first airplane is expected to cost $12 million;
it will enable the company to increase its annual cash inflow by $4
million per year. The plane is expected to have a useful life of
five years and no salvage value. The second plane cost $24 million;
it will enable the company to increase annual cash flow by $6
million...
Stuart Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $12,190,000; it will enable the company to increase its annual cash inflow by $5,300,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $35,600,000; it will enable the company to increase annual cash flow by $8,900,000 per year. This...
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