Please, I won't get a and b right. Thank you!
a) | EAC of the new jet = 1120000*0.10*1.1^5/(1.1^5-1) = | $ 2,95,453.18 |
b) | PV of the additional cost = 22000/1.1 = | $ 20,000.00 |
c) | PV of the savings = 100000/1.1 = | $ 90,909.09 |
d) | No |
Please, I won't get a and b right. Thank you! Problem 6-31 Equivalent annual costs The...
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The president's executive jet is not fully utilized. You judge that its use by olher officers would increase direct operating costs by only $22,000 a year and would save $100,000 a year in airline bills. On the ather hand, yau believe that with the increased use the company will need to replace the jet at the end of three years rather than four. A new jet costs $1.19 mland (at its current low rate of use) has a life of...
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