Global Airlines Operates Two Types of Jet Planes: Jumbo and Ordinary

question 73

Short Answer

Global Airlines operates two types of jet planes: jumbo and ordinary. On jumbo jets, 25% of the passengers are on business while on ordinary jets 30% of the passengers are on business. Of Global's air fleet, 40% of its capacity is provided on jumbo jets. (Hint: you have been given two conditional probabilities.)
a. What is the probability a randomly chosen business customer flying with Global is on a jumbo jet?
b. What is the probability a randomly chosen non-business customer flying with Global is on an ordinary jet?

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Definitions:

Compensating Balance

A minimum balance that must be maintained in a bank account, often required by banks in return for loans or as a condition for obtaining certain services.

Effective Annual Cost

This term refers to the total cost of borrowing on an annual basis, including interest and any fees, taking compounding into account.

Nominal Cost

The original cost of an asset or investment, not adjusted for inflation or other factors affecting its current value.

Trade Credit

An arrangement to buy goods or services on account, that is, without making immediate cash payment, usually evidenced by an invoice.