United Airlines plan to buy 34 airplanes for $120,000,000.Flight operations and ground costs are expected to be $7,000,000per year and $4,000,000 per year respectively. United expects tosell 300,000 tickets and variable costs are expected to be 20percent of revenue. With a 14 percent required rate of return, whatminimum price per ticket are needed to justify the purchase of theairplanes? (Assume a 20- year life and no salvage value for theairplane at the end of 20 years)(Hint: Income = Rev. - Variablecost-Fixed Cost, find annual revenue).
