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Question 21 3.5 p JetTaxi is a passenger airplane line that contracts with larger, well-known lines to provide transportation across the United States. JetTaxi

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Question 21 3.5 p JetTaxi is a passenger airplane line that contracts with larger, well-known lines to provide transportation across the United States. JetTaxi owns 30 aircraft, and currently has contracts for 20 of those aircraft. JetTaxi normally charge- $2,700,000 each year per jet to provide the carrier services. Each JetTaxi plane incurs yearly costs of $600,000 for labor, $200,000 for fuel, $400,000 in fixed overhead, and $800,000 in variable overhead. JetTaxi is considering a new contract where they would provide 5 airplanes to a new company for $2,000,000 each year per jet. Should JetTaxi accept the contract? Why? O No, because the differential net income would be zero. O Yes, because the differential net income would be $2M. O No, because the differential net income would be - $2M. O Yes, because the differential net income would be $1.6M.

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