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August 15, 2021

New-model commercial airplanes are much more fuel-efficient than older models.

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New-model commercial airplanes are much more fuel-efficient than older models. How is it possible for airlines flying older models to make money when their competitors are flying newer planes? When answering this question, consider capital budgeting. If the old planes still make money, does it make sense to buy new planes, given how long it would take to make the money back from the purchase of new planes? Explain thoroughly.

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