Does buying a plane add to my company value?

[stevenf]

Does buying a plane add to my company value?

If yes, does it effect my company value when the plane gets older and loses it's value?

Thanks!

[ukatlantic]

It certainly does- If you buy an aircraft it adds to the value of your company, and certainly if your look to get big loans from the bank you will need aircraft to use as assets against the loan.  Also as you are not paying leasing costs against that aircraft you make more profit 

[psw231]

  Buying aircraft will maintain company value as you are removing cash value and adding asset value but it only shows up in your value when it arrives in your fleet if you have ordered it from the new or used ac market. And as said above your operating costs for owned ac will be lower and will make you higher profits. If you buy one of your current fleet off lease it will show up as an asset right away but you will pay a penalty of 1/2 the remaining lease value on top of the ac value to do this, so it is best to only do this late in the lease and only with ac that are young enough to be leased out or that will last to the end of the game world period.

[stevenf]

Thanks!!

[ddrummond87]

From an accounting standpoint. No buying an airplane does not add company value. It only moves money from current assets to fixed assets. I wish they had investments you could make in this game because what you're doing in maintaining a business is trying to beat the market. So you could invest all your money in the market or in a CD and get a 3% return. Or you could run your own business and get a 10% return. That 7% is the reason you run a business instead of being lazy and getting a CD. So back to your initial question. Buying a plane might even take down company value. The loan on the airplane becomes a liability and the interest becomes an expense and those combined are probably more than the value of the plane. The only way it will add value is if you buy the airplane at such a discount that it actually appreciates more than the total amount of the loan principle liability and the interest expense when you purchase it. The way to beat these numbers is to use that airplane to generate value. As your paying off that airplane, if you take out a loan, slowly the liability becomes an asset and that asset is used to generate revenue. But that asset is also depreciated and the accumulated depreciation is a contra asset and will eventually bring the value of the aircraft down to the salvage value (not to be confused with market value). It all comes down to you buy assets to generate revenue. If it doesn't generate revenue it's a liability. When all of this is done right then yes it does add company value.