Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
c) RentravPlane Inc. has agreed to charter one of its planes to take a group of tourists from Melbourne to Cairns. The tourists will return
c) RentravPlane Inc. has agreed to charter one of its planes to take a group of tourists from Melbourne to Cairns. The tourists will return to Melbourne by car, and hence they do not require the plane for the return trip. Rentra-Plane Inc. needs to return its plane to Melbourne within one day after its arrival in Cairns. Rentva~Plane Inc. is approached by a group who are interested in ying one way on its plane from Cairns to Melbourne. The manager of RentwaPlane wants to charge a price to that group that will cover the opportunity cost. The cost of fuel (that does not vary with number of passengers) is $5300 each way. The cost of wages to pilots is $1,0UU each way. The cost of wages to other ight crew is $1130!) each way if there are passengers and $509 each way if there are no passengers. Where passengers have traveled the cost of cleaning the plane is $1130. What is the minimum amount the manager should be willing to accept to rent the plane to travel from Cairns to Melbourne? Explain your reasoning
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started