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Problem 10-16 Unequel Lives Shao Airlines is considering the purchase of two alternative planes Plane A has an expected life of 5 years, will cost100

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Problem 10-16 Unequel Lives Shao Airlines is considering the purchase of two alternative planes Plane A has an expected life of 5 years, will cost100 million, and will produce net cash flows of30 million per year. Plane B has a life of 10 years, will cost $132 million and will produce net cash flows of S27 million per year. Shao plans to serve the route for only 10 years. Inflation in operating costs, airplane costs, and fares is expected to be zero, and the company's cost of capital is 11%. a. By how much would the value of the company increase if it accepted the better pro ect plane ? Enter your answer in millions For exa entered as 12, not 1 200,000 Round your answer Planeot of capital net cash flows of m h woutd the value er in millions. Fo mple, an answer of $1.2 million should be s 1.2, not 1,200,000. Round your answer to two decimal places. million b. What is the equivalent annual annuity for each plane? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000, Round your answers to two decimal places. Plane A million Plane 8 million

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