CABC Homepage
New Customer | Sign In
List of Popular Cases Newly Released Cases Faculty of Business and Economics Institutional Users Home Site Map
Advanced Search
Topic Index
Industry & Company Index
Most Popular Cases
Newly Released Cases
SME Cases Series
China Cases Series
India Cases Series
IT Industry Transformation Series
Cases in Chinese
Cases in Other Languages
Project SARS Rebound
Case Details:
Email to a friend
Hong Kong Dragon Airlines Limited (A): Determining the Cost of Capital  
Product Ref: 09/457C Company: Hong Kong Dragon Airlines Limited

Product Type: Case Industry: Airlines

Related Product(s): Teaching Note
Authors: Ko Wang   Su Han Chan   Andrew Lee
In early 2006, a taskforce at the Hong Kong Dragon Airlines ("Dragonair") was formed to evaluate alternative ways to replace a spare engine. The potential options were to either purchase the engine outright or to lease the engine via a direct lease or a sale-and-leaseback arrangement. However, to assess and compare the attractiveness of each option, the taskforce must first determine an appropriate discount rate to use.
Functional Area : Finance & Investments

Learning Objective: This two-part case series require students to decide which of three alternative methods Dragonair should use to acquire a spare engine for its fleet. The alternative methods are: an outright purchase, a direct lease, or a sale-and-leaseback arrangement. The important issues highlighted are the unique aspects of engine leasing, the cash flows relevant to a lease versus buy decision, the proper discount rates to use, and the influence of the residual value.
Length: 6 pages Country: Hong Kong SAR

Pub. Year: 2010 Level of Difficulty: 2
This product type is available in the following language(s):      English
Related Information: N/A
Order This Item
Type Language Quantity * Unit Price
Case (09/457C) HK$58 / US$7.5
* Order quantity should include copies that you plan to make
   for class use or distribute for other purposes.
   You will not be shipped hard copies for cases.