Question
Peabody transport Service is considering the purchase of a new helicopter for connecting services between their base and the new inter county airport being built
Peabody transport Service is considering the purchase of a new helicopter for connecting services between their base and the new inter county airport being built about 30 miles away. It is believed that the chopper will be needed only for six years until the rapid transit connection is phased in. The estimates on two types of helicopters under construction, Model A and Model B are given:
Assuming that the model A will be available in the future, with identical costs, what is the annual cost advantage of selecting the Model B? (Use an interest rate of 10%)
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