For the Capital Budgeting assignment, we need to put the answer
under either cash flows at start year 0, cash flows during life
year 1-9, and cash flows at the end of the life year 10.
This is the scenario for one section: Due to
their shape and size, the new Skyliner planes will not be able to
land and park in traditional airport gates. As a result, the
Skyliner planes will park at unique gates at both Sydney and John
F. Kennedy airports, and each Skyliner plane will require eight
airplane stair cases so that passengers can enter and exit the
plane. Kangaroo Airlines have eight idle airplane stair cases which
have been written off for tax purposes in both their Sydney and New
York warehouses located close to the airports.The sixteen airplane
staircases were purchased in the past for $250,000 each, and can be
sold today for $50,000 each. It is forecasted that the sixteen
staircases will be worthless at the end of the Skyliner capital
budgeting project.Virgil suggests that the airplane staircase cash
flows are irrelevant in the capital budgeting decision of the new
Skyliner planes.
