McKesson Inc. just purchased a new executive jet for its president. The jet is currently underutilized, and management is considering allowing other officers to use it. This move would save $119,980 per year in real terms in airline bills. Offsetting this benefit is the notion that the jet will have to be replaced a year sooner than originally planned. If the jet cost $30,200,000 and was originally expected to last 15 years, should management allow other officers to use the jet? The real opportunity cost of is 13%. Question 19 options: Yes, because the present value of saving, $756,172.52 is greater than the present value of cost, $321,913.38. Yes, because the present value of saving, $756,172.52, is greater than the present value of cost, $747,201.75. Yes, because the present value of saving, $775,356.21, is greater than the present value of cost, $747,201.75. No, because the present value of saving, $756,172.52, is less than the present value of cost, $844,337.97.
McKesson Inc. just purchased a new executive jet for its president. The jet is currently underutilized, and management is considering allowing other officers to use it. This move would save $119,980 per year in real terms in airline bills. Offsetting this benefit is the notion that the jet will have to be replaced a year sooner than originally planned. If the jet cost $30,200,000 and was originally expected to last 15 years, should management allow other officers to use the jet? The real opportunity cost of is 13%. Question 19 options: Yes, because the present value of saving, $756,172.52 is greater than the present value of cost, $321,913.38. Yes, because the present value of saving, $756,172.52, is greater than the present value of cost, $747,201.75. Yes, because the present value of saving, $775,356.21, is greater than the present value of cost, $747,201.75. No, because the present value of saving, $756,172.52, is less than the present value of cost, $844,337.97.
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
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Give typing answer with explanation and conclusion
Transcribed Image Text:McKesson Inc. just purchased a new executive jet for its president. The jet is currently underutilized, and management is
considering allowing other officers to use it. This move would save $119,980 per year in real terms in airline bills.
Offsetting this benefit is the notion that the jet will have to be replaced a year sooner than originally planned. If the jet
cost $30,200,000 and was originally expected to last 15 years, should management allow other officers to use the jet? The
real opportunity cost of is 13%.
Question 19 options:
Yes, because the present value of saving, $756,172.52 is greater than the present value of cost, $321,913.38.
Yes, because the present value of saving, $756,172.52, is greater than the present value of cost, $747,201.75.
Yes, because the present value of saving, $775,356.21, is greater than the present value of cost, $747,201.75.
No, because the present value of saving, $756,172.52, is less than the present value of cost, $844,337.97.
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