Solve the Problem $\mathrm { P } _ { 1 }$

question 185

Multiple Choice

Solve the problem.
-An airline with two types of airplanes, $\mathrm { P } _ { 1 }$ and $\mathrm { P } _ { 2 }$ , has contracted with a tour group to provide transportation for a minimum of 400 first class, 750 tourist class, and 1500 economy class passengers. For a certain trip, airplane $\mathrm { P } _ { 1 }$ costs $\$ 10,000$ to operate and can accommodate 20 first class, 50 tourist class, and 110 economy class passengers. Airplane $\mathrm { P } _ { 2 }$ costs $\$ 8500$ to operate and can accommodate 18 first class, 30 tourist class, and 44 economy class passengers. How many of each type of airplane should be used in order to minimize the operating cost?

• A) \(7 \mathrm { P } _ { 1 }\) planes and \(11 \mathrm { P } _ { 2 }\) planes
• B) \(9 \mathrm { P } _ { 1 }\) planes and \(13 \mathrm { P } _ { 2 }\) planes
• C) \(5 \mathrm { P } _ { 1 }\) planes and \(17 \mathrm { P } _ { 2 }\) planes
• D) \(11 \mathrm { P } _ { 1 }\) planes and \(7 \mathrm { P } _ { 2 }\) planes

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Definitions:

Times Interest Earned Ratio

A financial metric indicating how well a company can meet its interest obligations based on its earnings before interest and taxes.

Depreciation Expense

Dividing the expenditure of a solid asset over its effective life.

EBIT

Earnings Before Interest and Taxes, a financial metric that calculates a company's profitability from operations without the effects of interest and tax expenses.

Cash Coverage Ratio

A financial metric that measures a company's ability to cover its debt obligations with its cash and cash equivalents.