(a)[8]
- Refer to Appendix 2. Calculate the net present value (NPV) for the purchase of the two new aircraft. [4]
- Refer to Appendix 3. Calculate the new gearing ratio for SA if $80m is borrowed to buy two new aircraft. [4]
(b)[14]
Refer to your results from part (a) and the other information in the case. Recommend whether SA should purchase or lease the two aircraft.