NetPresentValueand.PDF

Ross Ch 08 12/7/07 4:24 PM Page 218 CAPITAL BUDGETING E n 2004 Paul Stoddart, former head of the Minardi Formula V I IOne racing team, announced his intention to start a new F T Australian airline (Ozjet) to compete with Qantas in the business R passenger market. His initial plans were to run eight flights a day A P between Sydney and Melbourne using three Boeing 737-300 aircraft. Then, as passenger numbers increased, he planned to expand operations to possibly ten aircraft and fly to other major capital cities: Brisbane, Adelaide and Perth. The Ozjet configuration was for a business class only with sixty business seats per plane. Although taking on Qantas is no easy task, Net Present Value and 8 Other Investment Criteria Paul believed there was plenty of room for competition and AFTER STUDYING THIS CHAPTER, YOU SHOULD was aiming to obtain only about 2% of the market. For example HAVE A GOOD UNDERSTANDING OF: the Sydney–