Question

Each Tuesday, Ryan Airlines reduces its one-way ticket from Fort Wayne to Chicago from $125 to $40. To receive this special $40 price, the customer must buy a round-trip ticket. Ryan has a nonrefundable 25% penalty fare for cancellation; it estimates that about nine-tenths of 1% will cancel their reservations. The airline also estimates this special price will cause a passenger traffic increase from 400 to 900. Ryan expects revenue for the year to be 55.4% higher than the previous year. Last year, Ryan's sales were $482,000. To receive the special rate, Janice Miller bought two round-trip tickets. On other airlines, Janice has paid $100 round trip (with no cancella- tion penalty). Calculate the following: LU 6-2(2) a. Percent discount Ryan is offering. b. Percent passenger travel will increase. c. Sales for new year. d. Janice's loss if she cancels one round-trip flight. e. Approximately how many more cancellations can Ryan Airlines expect (after Janice's cancellation)? 6_95 A local Dunlrinn

Answer 1

The percentage discount Ryan is offering is 34%.

The percentage increase in passenger travel is 125%.

The sales for the new year is $147,510.

Janice's loss if she cancels one round trip is $41.25.

The number of cancellations that can be expected is 7.

What is the discount Ryan is offering?

Percent discount = (change in price of round trip / price of a round trip before discount) x 100

• Price of a round trip before discount = $125 x 2 = $250
• Price of a round trip after discount = $125 + $40 = $165
• Change in price of round trip = $250 - $165 = $85

Percent discount = ($85 / $250) X 100 = 34%

What is the percentage increase in passenger travel?

Percent increase = (change in number of passengers / initial passengers) x 100

(900 - 400) / 400 x 100 = 125%

What is the sales for the new year?

The sales for the new year = penalty fare for those who cancelled + total revenue from those who do not cancel.

Penalty fare for those who cancelled = 9/10 ( 0.01 x 900) = 8 people would cancel

25/100 x 8 x $165 = $330

Total revenue from those who do not cancel = (900 - 8) X $165 = $147,180

The sales for the new year = $147,180 + $330 = $147,510

What is Janice loss if she cancels one round trip?

Loss = 25/100 x $165 = $41.25

How many more cancellations can be expected?

8 - 1 = 7

To learn more about how to calculate discounts, please check: brainly.com/question/26061308