Solution-How much expected profit will the flight generate

How much expected profit will the flight generate

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Q1. A company has revenue of $1000 in 2009. Our current estimate is that revenues will grow 25% per year. Our profit each year will equal 20% of revenue. What annual growth rate (rounded to the nearest 1%) in revenue would yield a total profit of $15,000 for years 2009-2015 for this situation.

Q2. An airline sells 120 tickets for a flight that seats 100. Each ticket is non-refundable and costs $200. The unit cost of flying a passenger (fuel, food, etc.) is $80. If the flight is overbooked, each person who does not find a seat is given $300 in cash. Assume it is equally likely that any number of people between 91 and 120 show up for the flight. Rounded to the nearest thousand (e.g., 18500 rounds to 19000), on the average how much expected profit (ignoring fixed cost) will the flight generate?

Q3. You are going to borrow $500,000 to buy a house. Assume an annual interest rate of 8%. The length of the loan is 30 years and you are making payments at the end of each month. Your monthly payment is _____.

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How much expected profit will the flight generate

Reference no: EM132040724

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