Air New Zealand is negotiating with an aircraft leasing company over the lease contract for some additional airplanes. The lease company is their only potential supplier of aircraft. Any airplanes that Air New Zealand does not want can be leased in the United States to small regional airlines, for about $2m per year. Air New Zealand has a few routes on which it is considering using the aircraft: Christchurch-Queenstown: one extra airplane would earn AirNZ an additional $4m profit per year on that route, two extra airplanes would earn them $5m per year on that route (relative to current profits) Wellington-Auckland: one extra airplane would earn them an additional $10m per year, two extra airplanes would earn $13m per year on that route (relative to current profits) Wellington-Nelson: one extra airplane would earn them an additional $4m per year relative to current profits Question 1: How many airplanes does AirNZ lease? On which routes? Group of answer choices Two, for use on the Auckland-Wellington route Four; two on the Christchurch-Queenstown route and two on the Auckland-Wellington route Four; one on the Christchurch-Queenstown route, two on the Auckland-Welllington route, and one on the Wellington-Nelson route. Five. Questions 2: What is the negotiated (per year) payment to the lease company? Please enter a whole number with no dollar sign. (So if your answer is $9 million, enter 9000000.)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

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Air New Zealand is negotiating with an aircraft leasing company over the lease contract for some additional airplanes. The lease company is their only potential supplier of aircraft. Any airplanes that Air New Zealand does not want can be leased in the United States to small regional airlines, for about $2m per year.

Air New Zealand has a few routes on which it is considering using the aircraft:

Christchurch-Queenstown: one extra airplane would earn AirNZ an additional $4m profit per year on that route, two extra airplanes would earn them $5m per year on that route (relative to current profits)
Wellington-Auckland: one extra airplane would earn them an additional $10m per year, two extra airplanes would earn $13m per year on that route (relative to current profits)
Wellington-Nelson: one extra airplane would earn them an additional $4m per year relative to current profits

Question 1: How many airplanes does AirNZ lease? On which routes?

Group of answer choices

Two, for use on the Auckland-Wellington route

Four; two on the Christchurch-Queenstown route and two on the Auckland-Wellington route

Four; one on the Christchurch-Queenstown route, two on the Auckland-Welllington route, and one on the Wellington-Nelson route.

Five.

Questions 2: What is the negotiated (per year) payment to the lease company?

Please enter a whole number with no dollar sign. (So if your answer is $9 million, enter 9000000.)

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