4. (44 points) Suppose the Army is considering three alternatives to replace an aging fleet of executive transport aircraft. The three alternatives are (a) Buy 10 Puddle Jumpers; (b) Buy 10 Mud Skippers; (c) Lease 10 Criss Crossers; and (d) the status quo is to continue to maintain the existing fleet of 10 Maxi-Fliers. The period of comparison is FY21 through FY30. The status quo and the alternatives are outlined below: a. Status quo (Maxi-Flier): Ten aging Maxi-Fliers. The Maxi-Fliers can carry 18 passengers, have a range of 3300 nautical miles, achieve a fuel economy of 2.3 gallons per nautical mile, and have a cruising speed of 345 knots. Beginning in FY21, the annual O&S cost to maintain the ten aircraft will be $10.5M per year per aircraft. It is expected that due to further aging and degradation, this O&S cost will increase by SLIM per aircraft every year. If one of the alternative options is chosen, then the ten Maxi-Fliers will be sold on the foreign market for $7.5M per aircraft. b. Buy Option 1 (Puddle Jumpers): The first purchase alternative is to acquire ten new Puddle Jumpers. The Puddle Jumpers can carry 16 passengers, have a range of 2500 nautical miles, achieve a fuel economy of 1.9 gallons per nautical mile, and have a cruising speed of 485 knots. The annual O&S cost is expected to be $9.1M per year per aircraft, increasing to $10.9M per year after five years of operation. These aircraft will be purchased immediately beginning in FY21 at a cost of $24M each, half of which must be paid at the beginning of FY21, and the remaining half of which must be paid at the beginning of FY26. c. Buy Option 2 (Mud Skippers): Another purchase alternative is to acquire ten new Mud Skippers. The Mud Skippers can carry 19 passengers, have a range of 2600 nautical miles, achieve a fuel economy of 2.1 gallons per nautical mile, and have a cruising speed of 365 knots. The annual O&S cost is expected to be $8.1M per year per aircraft, increasing to $10.3M per year after five years of operation. If this alternative is chosen, it will require one year to modify the hangar at a cost of $6M. The hangar modification will occur during FY21, and the aircraft will then be purchased at the start of FY22. Meanwhile, the Army will continue to use the Maxi- 4. (44 points) Suppose the Army is considering three alternatives to replace an aging fleet of executive transport aircraft. The three alternatives are (a) Buy 10 Puddle Jumpers; (b) Buy 10 Mud Skippers; (c) Lease 10 Criss Crossers; and (d) the status quo is to continue to maintain the existing fleet of 10 Maxi-Fliers. The period of comparison is FY21 through FY30. The status quo and the alternatives are outlined below: a. Status quo (Maxi-Flier): Ten aging Maxi-Fliers. The Maxi-Fliers can carry 18 passengers, have a range of 3300 nautical miles, achieve a fuel economy of 2.3 gallons per nautical mile, and have a cruising speed of 345 knots. Beginning in FY21, the annual O&S cost to maintain the ten aircraft will be $10.5M per year per aircraft. It is expected that due to further aging and degradation, this O&S cost will increase by SLIM per aircraft every year. If one of the alternative options is chosen, then the ten Maxi-Fliers will be sold on the foreign market for $7.5M per aircraft. b. Buy Option 1 (Puddle Jumpers): The first purchase alternative is to acquire ten new Puddle Jumpers. The Puddle Jumpers can carry 16 passengers, have a range of 2500 nautical miles, achieve a fuel economy of 1.9 gallons per nautical mile, and have a cruising speed of 485 knots. The annual O&S cost is expected to be $9.1M per year per aircraft, increasing to $10.9M per year after five years of operation. These aircraft will be purchased immediately beginning in FY21 at a cost of $24M each, half of which must be paid at the beginning of FY21, and the remaining half of which must be paid at the beginning of FY26. c. Buy Option 2 (Mud Skippers): Another purchase alternative is to acquire ten new Mud Skippers. The Mud Skippers can carry 19 passengers, have a range of 2600 nautical miles, achieve a fuel economy of 2.1 gallons per nautical mile, and have a cruising speed of 365 knots. The annual O&S cost is expected to be $8.1M per year per aircraft, increasing to $10.3M per year after five years of operation. If this alternative is chosen, it will require one year to modify the hangar at a cost of $6M. The hangar modification will occur during FY21, and the aircraft will then be purchased at the start of FY22. Meanwhile, the Army will continue to use the Maxi
