Based on your teams determination of the number of airplanes needed, ExpressJet isconsidering multiple options for acquiring the Embraer 170 airplanes at a price of $10.9million each

Based on your teams determination of the number of airplanes needed, ExpressJet isconsidering multiple options for acquiring the Embraer 170 airplanes at a price of $10.9million each. The executives in charge of capital acquisitions at ExpressJet are relyingon you to show and explain which option will place the company in the best financialposition based on your Net Present Value calculations. In the past, all acquisitions havebeen in cash. However with the current trend of the company, the options beingconsidered are as follows:ExpressJet will borrow the funds necessary on a 5-year note from Bank ofAmerica. This will cause the marginal tax rate to be 35%ExpressJet will lease the planes for 10 years from LeaseCo. This will be anoperating lease. This will cause the marginal tax rate to be 35%.Calculate Net Present Value for all the scenarios as compared to a cash purchase. Usethe below data to fill in the spreadsheet.Cost of new equipment: $10,900,000Expected life of equipment in years: 30Disposal value in 5 years: $1,090,000Lifetime miles per plane: 1,575,000,000Annual miles per year: 52,500,000Number of workers needed: 3Annual hours to be worked per employee: 2,000Earnings per hour for employees: $35Annual health benefits per employee: $2,000Other annual benefits per employee—% of wages: 15%Cost per Passenger Seat Mile: $0.06Other variable costs per Seat Mile: $0.10Costs to purchase cans—per can: $0.50Required rate of return: 11%