Question 1 Airbus, an airplane producer, offers the following deal to its customers (ie, airlines): "An airline that purchases a plane is awarded the right to sell it back to Airbus within 10 years at a pre-specified price." This right is valuable to airlines, as they may decide to sell the plane back if demand for air travel declines. Based on its experience in the U.S., Airbus charges $150 million per plane, which includes the purchase of the plane plus the right to sell it back. Airbus is now about to sell planes to some customers in Latin America, and it plans to charge the same price. However, the CFO is not convinced. She says. "Airline business is a lot more volatile in Latin America than in the U.S. We were already only breaking even with $150 million per plane in the U.S., so if we charge the same price to our Latin American customers we will lose money." Do you agree with the CFO? Explain. Question 1 Airbus, an airplane producer, offers the following deal to its customers (ie, airlines): "An airline that purchases a plane is awarded the right to sell it back to Airbus within 10 years at a pre-specified price." This right is valuable to airlines, as they may decide to sell the plane back if demand for air travel declines. Based on its experience in the U.S., Airbus charges $150 million per plane, which includes the purchase of the plane plus the right to sell it back. Airbus is now about to sell planes to some customers in Latin America, and it plans to charge the same price. However, the CFO is not convinced. She says. "Airline business is a lot more volatile in Latin America than in the U.S. We were already only breaking even with $150 million per plane in the U.S., so if we charge the same price to our Latin American customers we will lose money." Do you agree with the CFO? Explain