Passengers Case

Ques 1) The CAB regulation requires the servicing of a minimum number of 300,000 passengers per year. With the data available, PJ-1 can hold up to 200 passengers per plane per flight, with a total number of 300 flights per year. This when multiplied gets us 60,000. Taking the into account the CAB regulation, a minimum of 5 PJ-1's would be needed. ( 300000/60000=5)

When it comes to PJ-2, the number of flights per year is 320. The capacity of the plane is 250. This when multiplied gets us 80,000. When we take the CAB regulation into account, the number we get is 3.75. ( 300000/80000=3.75). Since we cannot have 3.75 planes, a total of 4 PJ-2's would be needed.

When it comes to the PJ-3's, the number of flights per year is 335. Plane capacity is 350. This multiplied gives us 117,250. When CAB is taken into account, the number we get is 2.558. ( 300000/117250=2.558). Since we cannot have 2.558 planes, a total of 3 PJ-3's would be needed.

Question 2) Ticket revenue for option A over 15 year horizon

Price per ticket is now $500 with a growth of 5% compounding every year. Thus to find value of ticket for the future, we use the formula of FV = PV*(1+r).