Discussion
An airline flies \( 2800 \) hours a year at a direct operating cost of \( 7400 \) dollars per hour. The annual direct operating cost is
Answer: B
Correct answer: 20.7 million dollars
Multiply the hourly cost by the annual utilisation:
\[ 2800 \times 7400 = 20\,720\,000 = 20.7\ \mathrm{million\ dollars} \]
The distractors misplace the decimal by a factor of ten either way, which is the usual hazard in figures of this size. Note that this covers direct costs only: the airline's indirect costs - administration, marketing, reservations, ground services - must be added before the aircraft's contribution to the business can be judged.
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