Exercise 16-12A (Algo) Determining the payback period LO 16-4 Baird Airline Company is considering expanding its teritory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $13.020,000, it will enable the company to increase its annual cash inflow by $6.200,000 per year. The plane is expected to have a useful lide of five years and no salvage value. The second plane costs $40,040,000, it will enable the company to increase annual cash flow by $9.100,000 per year. This plane has an eight-year useful life and a zero salvage value Required 6. Determine the payback period for each investment alternative and identify the altenative Baird should accept if the decision is based on the payback approach (Round your answers to 1 decimel place.) Payback Perlod a-1. Alternative 1 (First plane) years Altemative 2 (Second plane) years

Exercise 16-12A (Algo) Determining the payback period LO 16-4 Baird Airline Company is considering expanding its teritory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $13.020,000, it will enable the company to increase its annual cash inflow by $6.200,000 per year. The plane is expected to have a useful lide of five years and no salvage value. The second plane costs $40,040,000, it will enable the company to increase annual cash flow by $9.100,000 per year. This plane has an eight-year useful life and a zero salvage value Required 6. Determine the payback period for each investment alternative and identify the altenative Baird should accept if the decision is based on the payback approach (Round your answers to 1 decimel place.) Payback Perlod a-1. Alternative 1 (First plane) years Altemative 2 (Second plane) years

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 11PROB

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