ABC Taxis has an average fixed cost of £9,000 a year for each car. Each kilometre driven has variable costs of 40 pence and collects fares of 60 pence. How many kilometres a year does each car have to travel before making a profit? Last year each car drove 160,000 kilometres.

What does this tell you? How would the distance travelled have to change to reduce the average cost per kilometre by 5%?