Cronus Airlines has a contract that gives them the opportunity to purchase up to 7000000 gallons of jet fuel at $4 pergallon. The current market price of jet fuel is $4.2 per gallon. Cronus believes they will only need 5000000 gallons of jetfuel. What is the value of this opportunity?OA. $1,000,000OB. $400,000OC. $1,400,000OD. $2,000,000CECOE

Here we have to calculate the value of the opportunity.Cronus Airlines has the opportunity to…

Answered: Cronus Airlines has a contract that…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

It is estimated that there are 35 deaths for every 10 million people who use airplanes. A company that sells flight insurance provides $100,000 in case of death in a plane crash. A policy can be purchased for $1. Calculate the expected value and thereby determine how much the insurance company can make over the long run for each policy that it sells. The expected value is $ (Round to the nearest cent.) ITS
Please help me. Thankyou.
4
Randall's Ales & Porters S.A., is considering expanding into Costa Rica. As an incentive, Costa Rica agrees not to charge the company any taxes. The project has the following estimated data: price = $94 per unit variable costs = $50.76 per unit fixed costs = $7,600 required return = 16 percent initial investment = $11,000 life = three years depreciable life = three years, straight-line. Required: (a)What is the accounting break-even quantity? (Do not round your intermediate calculations.) (Click to select) ♥ (b)What is the cash break-even quantity? (Do not round your intermediate calculations.) (Click to select) ♥ (c) What is the financial break-even quantity? (Do not round your intermediate calculations.) (Click to select) ♥
pm.3
JS er st un gs Sunland, Inc. management is considering purchasing a new machine at a cost of $4,370,000. They expect this equipment to produce cash flows of $791,390, $796,950, $866,730, $1,116,300, $1,212,360, and $1,300,900 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) The NPV is tA $
Planet Airways has been given a 5-year license to start a budget airline between Stardust and Sundown. This service requires two planes which cost $6.5 million each, payable in one year’s time. Each aircraft will make one daily return trip, allowing for 350 flyable days per year. The remaining days of the year will be used to service the planes. The capacity of each plane is 200 passengers and the price per ticket is $550 per return trip. The average passenger load is 80 percent. The carrier’s office building will cost $26 million. Half of this amount is payable now and the balance is to be paid in a year’s time. The aircrafts and the building can be depreciated, for tax purposes, at the rate of 10% per annum of the initial cost. At the end of five years, the salvage values of the planes and the building are $2.6 million per plane and $7.8 million respectively.The operational costs will be $16,000 per one way trip (per flying day) and $6,000 per non-flying day, for each plane. The tax…
27² Riai Airlines is considering two alternative Planes. Plane A has an expected life of Sures Years, has an after-tax cost of $80 millian, and will produce after-tax cash flows ofst 21 $40 million per year. Plane B has a life of 10 years, has an after-tax cast of $119 million, and will produce after-tax cash flows of 121 $35 million per year. Rim plans to serve the uni route for 10 years. The company's WACC is 8%. If Rini needs to purchase a new Plane A, the after-tux cost will be $90 million, but cash inflows will remain the Should Rini all acquire Plan A or Plane B? Explain your answer, Enter your answers in millions. For example, same. on answer $10, 550,000 should be entered as lo.ss. Do not round intermediate calculations. Round your criswer to two decimal places. 2004200 Plane is the better project and will increase $ - $ the company's value by 5 millions. millions f ex boll 19 E TOUS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS