Unequal Lives

Shao Airlines is considering the purchase of two alternative planes. Plane A has an expected life of $5$ years, will cost $$100$ million, and will produce net cash flows of $$30$ million per year. Plane B has a life of $10$ years, will cost $$132$ million, and will produce net cash flows of $$25$ million per year. Shao plans to serve the route for only $10$ years. Inflation in operating costs, airplane costs, and fares are expected to be zero, and the company$$s cost of capital is $12\%.$ By how much would the value of the company increase if it accepted the better project $($plane$)?$ What is the equivalent annual annuity for each plane?

answer in simple steps $($ not in excel$)$