Rini Alrlines is considering two alternative planes. Plane A has an expected life of 5...
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Rini Alrlines is considering two alternative planes. Plane A has an expected life of 5 years, has an after-tax cost of $100 million, and will produce after-tax cash fows of $40 milion per year. Plane B has a life of 10 years, has an after-tax cost of $113 million, and will produce after-tax cash flows of $25 milion per year: Rini plans to serve the route for 10 years. The company's WACC is 10%. If Rini needs to purchase a new. Plane A, the arter-tax cost will be $115 milion, but cash inflows will remain the same. Should Rini acquire Plane A or Plane B? Explain ydur answer, Enter your answers in millions. For example, an answer of 510,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answer to two decimal places. Plane is the better project and will increase the company's value by $ milians
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