The aircraft have a useful life of 5 (five) years and a salvage value of $1 million.
The aircraft owners do not operate the aircraft themselves, but rent them to operators. Owners act competitively to maximize their rental income, and operators attempt to minimize their operating costs. Airfares are also competitively determined. Assume the cost of capital is 10%.
a. Which aircraft would be used on which route, and how much would each aircraft be worth?
b. What would happen to usage and prices of each aircraft if the number of Type A aircraft increased to 10, 15, or 20?
c. State any additional assumptions you need to make.
check attached for more details numbers!!!!

Do you need any assistance with this question?
Send us your paper details now
We'll find the best professional writer for you!