A new design of aircraft saves annually fuel consumption of 45,000 gallons of fuel costing $6 per gallon. The new design costs $1 million to accomplish. The airline company’s MARR is 10%. Considering only the fuel savings. What is the simple payback period for the new design? What is the discounted payback period?

A new design of aircraft saves annually fuel consumption of 45,000 gallons of fuel costing $6 per gallon. The new design costs $1 million to accomplish. The airline company’s MARR is 10%. Considering only the fuel savings. What is the simple payback period for the new design? What is the discounted payback period?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.4IP

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