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CAT 2007 — DILR Question 16

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Passage / Data

Answer the following question based on the information given below.

A low-cost airline company connects ten Indian cities, A to J. The table below gives the distance between a pair of airports and the corresponding price charged by the company. Travel is permitted only from a departure airport to an arrival airport. The customers do not travel by a route where they have to stop at more than two intermediate airports.

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If the prices include a margin of 10% over the total cost that the company incurs, what is the minimum cost per kilometer that the company incurs in flying from A to J?

Answer & solution

Correct answer: 0.88

  • A

    0.77

  • 0.88

  • C

    0.99

  • D

    1.06

  • E

    1.08

Solution

The minimum cost per km that the company incurs would correspond to the minimum price per km route.

By observation from the table, minimum price per kilometre is for the route AHJ and is equal to 

2275/2350 = 0.97

Minimum cost per kilometre = 0.97/1.1 = 0.88

Hence, option (b).

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CAT 2007 DILR Q16: If the prices include a margin of 10% over the total cost that the company incurs, what is the minimum cost pe — Solution | TheCATExam