Capital Budgeting and Leasing
Qantas is considering the purchase of either a new Boeing B747-400ER or an Airbus A340-600E for use on the Perth-London-Perth route. The cost of a 747-400ER is $US256m and the cost of an A340-600 is €198m. Exchange rates are $US1.00 = AUD1.15 and €1.00 = AUD1.45. Both aircraft have an effective life of 25 years. Qantas uses the straight line method of