16 The companys jet is not fully utilised The company plans to allow more staff members to use the jet However, with the increased use, the company will need to replace the existing jet at the end of four years rather than five A new jet costs $6 million and, at its current rate of use, has a life of six years Assume that the tax rate is zero and the opportunity cost of capital is 10 The present value of the additional cost of using the excess capacity of the existing jet is 16 The company's jet is not fully utilised The company plans to allow more staff members to use the jet However, with the increased use, the company will need to replace the existing jet at the end of four years rather than five A new jet costs $6 million and, at its current rate of use, has a life of six years Assume that the tax rate is zero and the opportunity cost of capital is 10 The present value of the additional cost of using the excess capacity of the existing jet is (a) $940 950 (b) $683,013 $855,409 $620 921 $1,377,644

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16. The companys jet is not fully utilised. The company plans to allow more staff members to use the jet. However, with the increased use,

16. The companys jet is not fully utilised. The company plans to allow more staff members to use the jet. However, with the increased use, the company will need to replace the existing jet at the end of four years rather than five. A new jet costs $6 million and, at its current rate of use, has a life of six years. Assume that the tax rate is zero and the opportunity cost of capital is 10%. The present value of the additional cost of using the excess capacity of the existing jet is:

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16. The company's jet is not fully utilised. The company plans to allow more staff members to use the jet. However, with the increased use, the company will need to replace the existing jet at the end of four years rather than five. A new jet costs $6 million and, at its current rate of use, has a life of six years. Assume that the tax rate is zero and the opportunity cost of capital is 10%. The present value of the additional cost of using the excess capacity of the existing jet is (a) $940.950 (b) $683,013 $855,409 $620.921 $1,377,644