DirectJet, is considering leasing one of the following hangars for 10 years. Using ROR analysis and assuming a MARR of 12%, which location should be leased by DirectJet? First cost AOC Salvage value Life years Hangar A $2,000,000 $500,000 $400,000 10 Hangar B $3,000,000 $200,000 $800,000 10

DirectJet, is considering leasing one of the following hangars for 10 years. Using ROR analysis and assuming a MARR of 12%, which location should be leased by DirectJet? First cost AOC Salvage value Life years Hangar A $2,000,000 $500,000 $400,000 10 Hangar B $3,000,000 $200,000 $800,000 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

None

DirectJet, is considering leasing one of the following hangars for 10 years. Using ROR analysis
and assuming a MARR of 12%, which location should be leased by DirectJet?
First cost
AOC
Salvage value
Life, years
Hangar A
Hangar B
$2,000,000
$3,000,000
$500,000
$200,000
$400,000
$800,000
10
10
Hangar B with a PW = -$823,860
Hangar B with a PW = $823,860
Hangar A with a PW = $823,860
Hangar A with a PW = -$823,860

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