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What capital budgeting tools could the patriots have used

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Reference no: EM132527482

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.

  • 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.
  • If a franchise does not own its own planes, the costs of chartering planes is estimated to be about $4 million for the season.
  • The Patriots management has indicated that it may rent out the planes when not in use by the team.

Problem 1: What capital budgeting tools could the Patriots have used to analyze this aircraft purchase decision?

Reference no: EM132527482

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