Express Airlines Is Considering the Purchase of an Aircraft to Supplement

question 46

Multiple Choice

Express Airlines is considering the purchase of an aircraft to supplement its current fleet. In estimating the impact of adding this aircraft to the fleet, management has developed the following expected cash flows: $$\begin{array} { | c | c | } \hline \text { Year } & \text { Cash Flow } \\\hline 1 & - \$ 1,000 \\\hline 2 & \$ 100,000 \\\hline 3 & \$ 100,000 \\\hline 4 & \$ 100,000 \\\hline 5 & \$ 100,000 \\\hline 6 & \$ 100,000 \\\hline 7 & - \$ 300,000 \\\hline\end{array}$$ If the discount rate is 10%, what is the present value of these estimated flows? (Round to the nearest whole dollar)

• A)$379,080
• B)$224,211
• C)$189,760
• D)$154,869
• E)$199,000

Appreciate the generative and dynamic nature of language in conveying information.

Understand the evolving functionality and impact of smartphones on society.

Identify large online databases and their proprietors.

Comprehend the purpose and components of management information systems.

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Definitions:

Goods Imports

The act of bringing products or services into one country from another for the purpose of trade or sale.

Current Account Entry

Transactions that reflect the difference between a country's savings and its investment in a given period, including trade balance and foreign income.

Financial Account Entry

A record in the financial accounts that captures transactions like borrowing, lending, or investing.

Financial Account Deficit

A situation where the value of a country's imports of financial assets exceeds its exports over a given period.