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...
-
Did the trial court abuse its discretion by striking Robins Woods answer?
-
In Poland, students are required to achieve a score of 21 or higher on the high-school Polish language maturity exam to be eligible for university enrollment. The following graph shows the frequency...
-
The data set lists the out-of-pocket prescription medicine expenses (in dollars) for 30 U.S. adults in a recent year. Construct a frequency distribution that has seven classes. 200 239 155 252 384...
-
Lowell Companys December 31, 2012, trial balance includes the following accounts: Inventory $120,000; Buildings $207,000; Accumulated DepreciationEquipment $19,000; Equipment $190,000; Land (held for...
-
If annual worth of the project is 5200 it's annual benefits are 5000 yearly the operating costs are 400 yearly and the project for 15 years then the salvage value 15450 (I=10%)
-
Complete Tsate's Form 1040-SR, Schedules A, B and D, Form 8949, Form 6252 and Qualified Dividends and Capital Gain Tax Worksheet. Tsate Kongia (birthdate 02/14/1954) is an unmarried high school...
-
You need to know the height of a tower, but darkness obscures the ceiling. You note that a pendulum extending from the ceiling almost touches the floor and that its period is 12 s. The acceleration...
-
How would you describe and occupation? How would you describe a profession? What are the differences?
-
17. How would you describe and occupation? How would you describe a profession? What are the differences?
-
Discuss the due diligence process. Give examples and also send the references used.
-
How do regulators want banks to use derivatives - for what purpose?
-
Explain the five important quantities or measures that are important tomortgage loan analytics.
-
MNO acquired the net assets of STW. At the time of acquisition, STW's balance sheet was as follows: Accounts receivable $140,000 Inventory 80,000 Equipment, net 40,000 Building, net 270,000 Land...
-
The Strahler Stream Order System ranks streams based on the number of tributaries that have merged. It is a top-down system where rivers of the first order are the headwaters (aka outermost...
-
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.
-
Steam from an engine exhaust at 1.25 bar flows steadily through an electric calorimeter and comes out at \(1 \mathrm{bar}, 130^{\circ} \mathrm{C}\). The calorimeter has two \(\mathrm{kW}\) heaters...
-
The properties of water and steam become identical at (a) 0.1 bar (b) 1 bar (c) \(100 \mathrm{bar}\) (d) 212.2 bar.
-
In thermodynamic analysis, a pure substance is that which (a) Consists of only a single chemical species (b) has no dissolved impurities (c) may have a number of chemical species but the composition...
Study smarter with the SolutionInn App