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The table given below shows how, on average, the market value of a Boelng 7 3 7 has varled with its age and the cash
The table given below shows how, on average, the market value of a Boelng has varled with its age and the cash flow needed in
each year to provide a return. For example, if you bought a for $ million at the start of year and sold It a year later, your
total profit would be $ million, of the purchase cost.
Assume airlines write off thelr alrcraft stralghtIIne over years to a salvage value equal to of the original cost.
a Calculate economic depreclation, book depreclation, economic return, and book return for each year of the plane's life. Leave no
cells blank be certain to enter wherever required. Do not round intermedlate calculations. Enter your answers in millions
except for percentage values. Round your percentage answers to decimal place and other answers to decimal places.
b Suppose an airline Invested in a fixed number of Boelng s each year. Calculate the steadystate book rate of return. Do not
round intermedlate calculations. Enter your answer as a percent rounded to decimal places.
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