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Southwest Airlines is considering buying a new Boeing 737. The airplane will cost 28 million dollars today and then generate 8 million dollars per year
Southwest Airlines is considering buying a new Boeing 737. The airplane will cost 28 million dollars today and then generate 8 million dollars per year for the next 10 years. After 10 years, the airplane will not generate any cash for Southwest Airlines. If the cost of capital is 9%, what is the NPV (in millions of dollars) of buying the new airplane?
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