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Hong Kong Dragon Airlines Limited (A): Determining the Cost of Capital Case Solution & Answer

To protect your operation from 2007, Dragonair needed to replace an engine replacement is considered irreparable economic performance in late 2002. Three options are available to meet this need. First, Dragonair could buy engine plane, which would require placing an order with the manufacturer to 12 months in advance and pay an initial deposit. Second, the airline could choose a leaseback with a leasing company for which it would sell the engine, which bought the company leasing and new car leasing company for an agreed period. Third, the airline could hire a new engine directly from a leasing company, in this case, the contract would be the same as the sale-leaseback.
by
Su Han Chan,
Ko Wang,
Andrew Lee
Source: University of Hong Kong
6 pages.
Date Posted: January 15, 2010. Prod #: HKU882-PDF-ENG
Hong Kong Dragon Airlines Limited (A) Determine the cost of capital case solution

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