1 point
DirectJet, is considering leasing one of the following hangars for 10 years. Using ROR analysis and assuming a MARR of 12%, which location should be
leased by DirectJet?
Hangar A Hangar B
First cost $2,000,000 $3,000,000
AOC $500,000 $200,000
Salvage value $400,000 $800,000
Life, years 10 10
Hangar B with a PW = -$823,860
Hangar B with a PW = $823,860
Hangar A with a PW = -$823,860
Hangar A with a PW = --$823,860