Problem 10-15 Island Airlines Inc. needs to replace a short-haul commuter plane on one of its busier routes. Two aircraft are on the market that satisfy the general requirements of the route. One is more expensive than the other but has better fuel efficiency and load-bearing characteristics, which result in better long-term profitability. The useful life of both planes is expected to be about seven years, after which time both are assumed to have no value. Cash flow projections for the two aircraft follow. Initial cost Low Cost $555,000 113,000 High Cost $925,000 167,300 Cash inflows, years 1 through 7 d. Calculate the NPV and PI of each project assuming a cost of capital of 6%. Use annuity methods. Do not round intermediate calculations. Round PVFA values in intermediate calculations to four decimal places. Round NPV to the nearest dollar, round PI to two decimal places. Low Cost High Cost NPV PI Which plane is selected by NPV? cost plane. By PI? cost plane. e. Calculate the NPV and PI of each project, assuming the following costs of capital: 29, 4%, 6%, 8%, and 10%. Use annuity methods. Do not round intermediate calculations. Round PVFA values in intermediate calculations to four decimal places. Round NPV to the nearest dollar, round PI to two decimal places. Use a minus sign to indicate a negative NPV. Low Cost High Col 2% NPV a