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Continental Airlines Case

Continental Airlines Case - Depreciation 4.55 Accumulated...

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Continental Airlines Case David Lambert E. Continental Airlines owns approximately 145 of the aircraft valued 6,574 million dollars and capital lease approximately seven aircraft at 107 million dollars. A capital lease is actually installment payments that end up paying for the aircraft, where as actually owning an aircraft is paying for the aircraft in full. F. [$6,574 million – (15% * $6,574 million)] / 30 yrs = $186.26 million per year Depreciation 186.26 Accumulated Depreciation 186.26 G. [$107 million – (15% * 107 million)] / 20 years = $4.55 million per year
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Unformatted text preview: Depreciation 4.55 Accumulated Depreciation 4.55 H. The present value of the 323 million dollars goes onto the long term debt and capital leases section in the balance sheet. I. i. irr ( -404, {44, 46, 39, 40, 45,47.3}, {1,1,1,1,1,10} ) = 7.33% ii. Interest Expense (2004): 7.33% * 323 = $23.68 Interest Expense 23.68 Interest Payable 23.68 iii. 17.95 + 44 = $61.95 total cash paid for leases in 2004 iv. Interest Expense 23.68 Lease Payable 20.32 Cash 44 v. The 23.68 would be classified as a current liability instead of a long term liability now....
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