The table below gives some elements to the average price development of an airport (per passenger)...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The table below gives some elements to the average price development of an airport (per passenger) in percent according to the price-cap formula for the next 4 years. Expected Inflation Quality Factor Year 1 Year 2 Year 3 Year 4 2,0 2.5 1,5 1,0 Expected Productivity Gain 1,0 1,5 0,4 0,9 0,0 0,0 +0,5 a. Compute the yearly price adjustment of the airport. Compute the yearly price development for a take-off/landing with 150 passengers onboard, if in year Zero the price per passenger was € 12,00. b. If you were an airline manager, would you like this scheme? Provide a discussion giving the reasons. Pay in your discussion special attention to the quality factor. Question 6 - Airport Pricing (13 points) Airport Garlovice estimated Its cost function, which is given with the following equation: C (95;91) = 20 + 0.001* qs + 0.002 * ql Where total cost is measured in millions of €, qs is the volume of small aircrafts take-off and landings, quis the volume of large aircrafts take-off and landings and 20 is the annual fixed and common cost in millions of €. The airport has a demand of qs 6000 flights per year and q- 1000 flights per year. a. Calculate the airport profit, if the airport sets its take-off and landing fees equal to the Marginal Cost. What do you observe? What advantages and disadvantages has this pricing principle for airports? b. Compute the Fully Distributed Cost (FDC) Prices, Use for weights the relative outputs. feF (Hint: For FDC prices you get: Pi = + (₁.) qi The table below gives some elements to the average price development of an airport (per passenger) in percent according to the price-cap formula for the next 4 years. Expected Inflation Quality Factor Year 1 Year 2 Year 3 Year 4 2,0 2.5 1,5 1,0 Expected Productivity Gain 1,0 1,5 0,4 0,9 0,0 0,0 +0,5 a. Compute the yearly price adjustment of the airport. Compute the yearly price development for a take-off/landing with 150 passengers onboard, if in year Zero the price per passenger was € 12,00. b. If you were an airline manager, would you like this scheme? Provide a discussion giving the reasons. Pay in your discussion special attention to the quality factor. Question 6 - Airport Pricing (13 points) Airport Garlovice estimated Its cost function, which is given with the following equation: C (95;91) = 20 + 0.001* qs + 0.002 * ql Where total cost is measured in millions of €, qs is the volume of small aircrafts take-off and landings, quis the volume of large aircrafts take-off and landings and 20 is the annual fixed and common cost in millions of €. The airport has a demand of qs 6000 flights per year and q- 1000 flights per year. a. Calculate the airport profit, if the airport sets its take-off and landing fees equal to the Marginal Cost. What do you observe? What advantages and disadvantages has this pricing principle for airports? b. Compute the Fully Distributed Cost (FDC) Prices, Use for weights the relative outputs. feF (Hint: For FDC prices you get: Pi = + (₁.) qi
Expert Answer:
Answer rating: 100% (QA)
a Compute the yearly price adjustment of the airport and the yearly price development for a takeofflanding with 150 passengers onboard if in year Zero the price per passenger was 1200 Year 1 Yearly pr... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
As purchasing agent for Laurentian Enterprises in Quebec City, you ask your buyer to provide you with a ranking of excellent, good, fair or poor for a variety of characteristics for two potential...
-
Using the loop rule, derive the differential equation for an LC circuit (Eq.31-11).
-
A food inspection office is analyzing milk samples from 75 vendors for adulteration. The milk supplied by six of the vendors have high levels of adulteration. Five vendors are randomly selected from...
-
The Azuza Company owns no plant assets and had the following income statement for the year: Additional information about the company includes: Use the preceding information to calculate the cash flow...
-
Digital Storage Concept Inc. is considering a change to activity-based product costing. The company produces two products, cell phones and tablet PCs, in a single production department. The...
-
Analyze the Wal-Mart US Based Company using Liquidity, Profitability and Growth Ratios. Also do short analysis of your answers.
-
Bamboo Consulting is a consulting firm owned and operated by Lisa Gooch. The following end-of-period spreadsheet was prepared for the year ended July 31, 2016: Based on the preceding spreadsheet,...
-
Westmoreland Bank ends a Wednesday with $4,544,500 in its reserve account. On Thursday its customers deposits $345,660 in checks, and on Friday they deposit S467,845 in checks, both clearing on the...
-
In today's dynamic business environment, the implementation of management systems has become crucial for organizational success. Discuss the concept of integrated management systems ( IMS )...
-
Make a Problem Statement From one of the most recent articles that you would like to/or needs solving about a fashion/company of your choosing and write 3 objectives and include and explain Who it...
-
Assume that a company is going to invest 900,000 USD in a new project. We expect that the invested capital in the fixed assets will be fully depreciated within 3 years as follows: 500,000 USD,...
-
Big idea selected - The government should make college and university free. Part 2: HOW? What type of data will help build evidence or support for your big idea? In this section, you will first (2A)...
-
Nintendo has signed a 6-year currency swap contract with DZ Bank. The notional principals are 100 million for euros and 10 billion for yens. At the inception date of the swap, Nintendo receives the...
-
Without performing any manipulation, say how many solutions the equation x2 = -8 has.
-
What is taxable income, and what is the formula for determining taxable income?
-
The BLS reported that in July 2000, the labor force was 140.4 million, employment was 134.7 million, and the working-age population was 209.8 mil-lion. Calculate for that month the: a. Unemployment...
-
Describe and evaluate the k-percent rule for monetary policy. Why does the Fed not follow this rule?
-
List and discuss the three preconditions for economic growth.
-
In its first month's operations (January 2019), Schramski Company's Department 1 incurred charges of \($120,000\) for direct materials (10,000 units). \($29,875\) for direct labor, and \($58,000\)...
-
The following data (and annotations) are for the work-in-process account of the first of Johnson Company's four departments used in manufacturing its only product for October of 2019. Assuming that...
-
The following data (and annotations) are for Joyner Company's processing department work-in-process account for the month of June 2019: Joyner uses the weighted average method. Materials are added at...
Study smarter with the SolutionInn App