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Do think aircraft depreciation is a relevant cost

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Reference no: EM132527253

The New England Patriots recently became the first National Football League (NFL) franchise to buy its own team aircraft. The Patriots purchased two Boeing 767 planes for a total of about $10 million. Both planes have been painted with the team's logo and colors.

  1. The Patriots will use the planes for the ten round trips for its away games during the 2017 - 2018 season. If the team would make the playoffs or Super Bowl, it would also use the planes for those games.
  2. If a franchise does not own its own planes, the costs of chartering planes is estimated to be about $4 million for the season.
  3. The Patriots management has indicated that it may rent out the planes when not in use by the team.

Question 1: Do you think aircraft depreciation is a relevant cost to consider when pricing the rental of the Patriots' aircraft? Why or why not?

Reference no: EM132527253

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