You own a car repair garage and a large field abutting a regional landing strip for single engine planes, are a very good mechanic and as a former Navy pilot you continued your flying as a civilian. You recently purchased your first plane, a 20 year old Wright Wingaway, for only $8500. This is a classic model and highly regarded. The engine, unfortunately, was in disrepair but the body was basically sound although scratched; you could fix it yourself. You are thinking very seriously about starting a new chartering business as a side business to your garage.
While working on the plane, you concluded the engine was far worse than expected; many engine parts needed replacing or reconditioning. Factory parts are no …show more content…
He mentioned that the engine was in excellent condition and suggested that if you were able to do the body repairs on his plane yourself, his plane could be put in flying condition for only $5000 or $6000 in parts and equipment. You know that a ten year old Flyabout in flying condition is worth from $30,000-$35,000. Graham refused to give you a price, asking instead for an offer. You told him that you would have to think about it and said you would contact him shortly. He agreed to let you know before he decided to sell the plane elsewhere.
Earlier today Graham called to tell you that he had received an interesting offer for his Flyabout and promised to make a decision tomorrow. You told him you'd stop by today. It is important to you to be able to strike a bargain as you are anxious to get your Wingaway flying, and don't like the prospect of having to search out the replacement parts. However, you have concluded that there is no way you could put your hands on more than $12,000 cash immediately. Adding pressure is the fact that you the time is about up for you to have this plane ready for the charter season.
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