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:
Year Cash Flow
1 -$1,000
2 $100,000
3 $100,000
4 $100,000
5 $100,000
6 $100,000
7 -$300,000
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
C
Business
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Fill in the blank(s) with the appropriate word(s).
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