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In: Economics

Superior Air Flights is considering the purchase of a helicopter to connect service between its base...

Superior Air Flights is considering the purchase of a helicopter to connect service between its base airport and a new field being built about 30 miles away. The choppers are assumed to be needed for only 6 years until a rapid transit service is completed. Estimates of the two craft under consideration are as follows:

Birdie Rooster
First Cost (I) $95,000 $120,000
Annual Maintenance (OM) $3,000 $9,000
Salvage Value (S) $12,000 $25,000
Life in years (n) 3 6

Which option is cheaper per year and by how much? Use an interest rate of 10%. Also, what is the cost per mile if the copper flies 150 times between its base airport and new field per year. Show all work.

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This is my answer

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Rahul Sunny answered 2 years ago
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