Question

QUESTION S The Tree Top Airline (TTA) is a small feeder-freight line started with very limited capital to serve the independent petroleum operators in the arid Southwest. All of its planes are identical, although they are pointed different colors. TTA has been contracting its plane overhaul work to Alamo Airmotive for $40,000 per plane per year. TTA estimates that, by building a $500,000 maintenance facility with a Ide of 15 years and a residual (market) value of $100,000 at the end of its ife, they could handle their own overhaul at the cost of only $30,000 per plane per year. What is the minimum number of planes that they must operate to make it econiomically feasible to build this facility? The MARR Is 10 % per year. (Enter your answer as a number without the dollar $ sign.)

Answer 1

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