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Retry questionMicroTransit in Metroville
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Math
Each MicroTransit van costs $200,000 annually to operate. Assume fare revenue of $10 per ride and an average of 50 rides per van per day. The vans operate for 350 days each year. The city has received a grant for $5M for the first year. How many vans can the city afford without running a deficit?
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Sample answer from an expert consultant
See the below steps to calculate the answer.
- First, consider the primary information given. Each van completes 50 rides per day. Each ride generates $10 in revenue. There are 350 days in a year.
- Using this information, we can figure out the expected revenue per year for each van: 50 * $10 * 350 = $175,000.
- The cost for each van is: $200,000. Therefore, the annual loss for each van is: $175,000 (revenue) - $200,000 (costs) = -$25,000
- We have a $5M loan, so we can calculate how many vans we can afford for the first year: $5,000,000/$25,000 = 200 vans.
Our final answer is 200 vans.
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