Hey my professor gave a practice set and this is one of the questions I'm struggling with..

1) Aergen, Inc. just bought an airplane that was under a five-year lease to an airline company.This lease provides the airline company an option to abandon the lease (cancel the lease) for a $0.5 million anytime over thefive yearlease. What is the underlying asset for the airline's abandonment option?How to value the underlying asset?What is the exercise price associated with the option to abandon this lease?

2) If a firm decides to switch from using straight-line depreciation to an accelerated method (MACRS), the depreciation expense will be higher in the early years of the investment.What would this change do to the level of after-tax operating cash flow during the early years of this investment?

3) When analyzing a firm's buy or build decision, they applied break even analysis and determined that if revenue in the first year of operations for the build alternative fell to $287.4 million or 4.3% less than our original estimate of $300 million, the two alternatives would have the same NPV.How would this finding affect your recommendation regarding the buy or build decision?

thank you!!!