1. Wings is a commuter airline that serves the Boston area. Wings plans to lease a new plane through Nantucket Capital Inc. The lease term is 15 years, and no residual value is expected at its end.

a. What monthly lease payment must Nantucket charge to earn a 12% return on its investment if the plane Wings wants costs $1.5 million?

b. What would Nantuckets return be if it agreed to accept annual payments of $200,000?

c. Suppose Wings and Nantucket agreed to assume a $300,000 residual value for the plane at the end of the lease. How much will Wings have to pay monthly to give Nantucket its 12% return?