An airline company has been contracting a maintenance company to do overhauls for its planes at a cost of $51275 per plane per quarter. The airline company estimates that by building a $1461838 maintenance facility with a life of 5 years and a residual market value of $770217 at the end of its life, they could handle their own overhaul at a cost of only $42020 per plane per quarter, What is the minimum number of planes they must operate to mako it just profitable to build this facility? (-2% per quarter).
An airline company has been contracting a maintenance company to do overhauls for its planes at a cost of $51275 per plane per quarter. The airline company estimates that by building a $1461838 maintenance facility with a life of 5 years and a residual market value of $770217 at the end of its life, they could handle their own overhaul at a cost of only $42020 per plane per quarter, What is the minimum number of planes they must operate to mako it just profitable to build this facility? (-2% per quarter).
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section: Chapter Questions
Problem 46P
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