Heritage Airways is considering a new route to Dubai or London. Based on the cash flow information presented below, a MARR of 10%, and a study period of 10 years, using ROR analysis, which route should Heritage Airlines select? Dubai Route First cost AOC AOR Salvage value Life, years London Route $300,000,000 $500,000,000 $50,000,000 $80,000,000 $100,000,000 $180,000,000 $30,000,000 $50,000,000 10 10 Dubai Route with PW = $134,215,000 Dubai Route with PW = $18,800,000 Do Nothing London Route with PW = $114,940,000
Heritage Airways is considering a new route to Dubai or London. Based on the cash flow information presented below, a MARR of 10%, and a study period of 10 years, using ROR analysis, which route should Heritage Airlines select? Dubai Route First cost AOC AOR Salvage value Life, years London Route $300,000,000 $500,000,000 $50,000,000 $80,000,000 $100,000,000 $180,000,000 $30,000,000 $50,000,000 10 10 Dubai Route with PW = $134,215,000 Dubai Route with PW = $18,800,000 Do Nothing London Route with PW = $114,940,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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