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a ) An airline currently tickets an average of 6 , 0 0 0 passengers daily. This task involves 5 0 employees at an average

a) An airline currently tickets an average of 6,000 passengers daily. This task involves 50 employees at an average annual salary of $12,000 each. A computer firm proposes a ticketing system which can do the job (including system maintenance) with only 30 employees. The systems purchase can be financed by borrowing at 15 percent per year. At what price does the system become attractive to the airline? b) Now, suppose that it is expected that, due to technical developments, the price of the above system will decline at an annual rate of about 5% for the foreseeable future. At what price does the system now become attractive?

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