Airline executive: 'Installing lighter carbon-fiber seats across our commercial fleet will reduce aircraft gross weight, thereby lowering fuel burn and operating expenditures. Therefore, the investment will yield net annual savings beginning in the first fiscal year.'

Which of the following is an assumption upon which the executive's argument relies?

Answer and explanation

Correct answer: D. The initial procurement and installation costs of the carbon-fiber seats do not exceed the fuel savings achieved during the first fiscal year

  1. Step 1: Identify the conclusion: the executive claims that retrofitting aircraft with carbon-fiber seats will yield net annual savings starting in the very first fiscal year.
  2. Step 2: Determine the necessary financial condition: for an initiative involving upfront capital investment to yield net savings in year one, the first-year fuel savings must surpass the upfront retrofit expenses.
  3. Step 3: The argument directly relies on the assumption that the initial procurement and installation costs of the carbon-fiber seats do not exceed the fuel savings achieved during that first fiscal year.
Answer
The initial procurement and installation costs of the carbon-fiber seats do not exceed the fuel savings achieved during the first fiscal year.

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