Brandeis University Operations And Supply Chain Management Assignment Help - World Airlines

Question - The world airline system is composed of the routes X and Y, each of which requires 10 aircraft.
These routes can be serviced by three types of aircraft - A, B, and C. There are 7 type A aircraft
available , 14 type B, and 14 type C. These aircraft are identical except for their operating costs,
which are as follows:
Aircraft Type Annual Operating Cost ($ Milions)
Route X Route Y
A 1.58 1.58
B 2.58 2.08
C 4.58 3.58
The aircraft have a useful life of five years and a salvage value of $1.08 million.
the sircraft owners do not operate the aircraft themselves but rent them to the operators. Owners act
competitively to maximize their rental income, and operators attempt to minimize their operating
costs. Airfares are also competitivel ...Read More y determined. Assume the cost of capital is 8%.
1.) How much would each aircraft be worth?
Aircraft A _____________
Aircraft B ______________
Aircraft C _____________
Assume the number of type A aircraft increased to 14.
2.) How much would each aircraft be worth?
Aircraft A _____________
Aircraft B ______________
Aircraft C _____________
Assume the number of type A aircraft increased to 21.
3.) How much would each aircraft be worth?
Aircraft A _____________
Aircraft B ______________
Aircraft C _____________ ...Read Less

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