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We fly workers from Calgary to the Diamonds Are For Eva diamond mine near Yellowknife, and we have a choice between buying a plane for

We fly workers from Calgary to the Diamonds Are For Eva diamond mine near Yellowknife, and we have a choice between buying a plane for $120 million, or leasing a plane for $15 million/year. The PVCCATS is $20 million. If we buy the plane, we pay $5 million in annual maintenance costs for 30 years. If we lease the plane, all maintenance is included. Assume no taxes, and no net impact on revenues or working capital.Using a 7% discount rate, what is the present value of each option? a) The PV of leasing the plane is equivalent to a cost of $162 million; the PV of purchasing the plane is equivalent to $186 million. b) The PV of leasing the plane is equivalent to a cost of $214 million; the PV of purchasing the plane is equivalent to $186 million. c) The PV of leasing the plane is equivalent to a cost of $186 million; the PV of purchasing the plane is equivalent to a cost of $162 million.d) The PV of leasing the plane is equivalent to a cost of $186 million; the PV of purchasing the plane is equivalent to a cost of $214 million.

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