Unoccupied Seats on Flights Cause Airlines to Lose Revenue

question 81

Multiple Choice

Unoccupied seats on flights cause airlines to lose revenue.Suppose a large airline wants to estimate its average number of unoccupied seats per flight over the past year.225 flight records are randomly selected and the number of unoccupied seats is noted,with a sample mean of 11.6 seats and a standard deviation of 4.1 seats.How many flights should we select if we wish to estimate μ to within 2 seats and be 95 percent confident?

• A) 130
• B) 65
• C) 33
• D) 17
• E) 12

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Definitions:

Net Present Value Method

A financial analysis tool used to determine the attractiveness of an investment by calculating the present value of its future cash flows.

Present Values

The present-day worth of a future sum of money or continual cash flows, using a particular rate of return for calculation.

Capital Investment Analysis

The process of evaluating and comparing the potential expenditures or investments of capital into projects or assets to determine their profitability and risk.

Long-Range Investment

Involves assets or securities purchased with the intention of holding them for an extended period, typically exceeding one year, aiming for long-term appreciation and income generation.