Ivanhoe Airways, Ink, a small two-plane passenger airline, has asked for your assistance in some...
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Ivanhoe Airways, Ink, a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Ivanhoe's base airport to the major city in the state, Metropolls. Each month, 40 round-trip flights are made. The following is a recent month's activity in the form of a cost-volume-profit income statement. If ticket prices were decreased by 10%, passenger flights would increase by 25%. However, total variable costs would increase by the same percentage as passenger nights. (1) How much would net income be impacted by this change? Net income tos. (2) Should the ticket price decrease be adopted
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