10.37 A leading regional airline that is now carrying 54% of all the passengers that pass through the Southeast is considering the possibility of adding a new long-range aircraft to its fleet. The aircraft being considered for purchase is the Boeing 717-200, which is quoted at $35 million per unit. Boeing requires a 10% down pay- ment at the time of delivery, and the balance is to be paid over a 10-year period at an interest rate of 9% compounded annually. The actual payment schedule calls for making only interest payments over the 10-year period, with the original principal amount to be paid off at the end of the 10th year. The airline expects to generate $40 million per year by adding this aircraft to its current fleet but also estimates an operating and maintenance cost of $30 million per year. The aircraft is expected to have a 15-year service life with a salvage value of 15% of the origi- nal purchase price. If the airline purchases the aircraft, it will be depreciated by the seven-year MACRS property classification. The firm's combined federal and state marginal tax rate is 38%, and its MARR is 18%. (a) Determine the cash flow associated with the debt financing. (b) Is this project acceptable