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
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ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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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 make it just profitable to build this facility? (=2% per quarter).
• 25
O 31
Clear my choice
Transcribed Image Text: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 make it just profitable to build this facility? (=2% per quarter). • 25 O 31 Clear my choice
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