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Eagle airlines owns and operates 3 small twin engine airplanes in a small community in eastern United States. It offers both scheduled and charter flights.
Eagle airlines owns and operates 3 small twin engine airplanes in a small community in eastern United States. It offers both scheduled and charter flights. It is considering expanding its fleet with a used Piper Seneca offered for $95K. Eagle Airlines believes it can successfully counter at $85K to $90K. An investment alternative to the fourth plane would be a fixed income instrument paying 8%. Projected financial impact of the new aircraft is calculated as follows: Tota!Revenue = Revenue Charters + Revenue Schedule Flights -(%charter" Hours"CharterPrice)+(1- %charter)* Hours *TicketPrice"Passengers"capacity FinanceCost-Price"%financed" Rate) TotalCost-Hours OperatingCost+Insurance+FinanceCost Profit TotalRevenue TotalCost Implement the spreadsheet below with the calculations above and run a one-way sensitivity analysis on profit using the limits in columns D and F. List the inputs from largest profit impact to smallest profit impact. Base Low High 2 Hours Flown 800 50% $100 $325 50% $245 $20,000 $87,500 11.5% 40% 500 40% $95 $300 45% $230 $18,000 $85,000 10.5% 30% 1000 60% $108 $350 70% $260 $25,000 $90,000 13.0% 50% 3 Capacity Ticket Price 5 Charter Price 6 Charter Proportion 7 Operating Cost 8 Insurance 9Aircraft Price 10 Interest Rate 11 Proportion Financed Proportion of Charter Flights Capacity Hours Flown Operating Cost Proportion Financed Charter Price Aircraft Price Interest Rate vInsurance Ticket Price
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