Huron University is committed to improving access to higher education. Each year it makes $4,500,000 available for scholarships for students based on financial needs and academic achievement. The scholarship covers the full annual tuition (based on a full course load) for the recipients. Tuition fees are based on credit hours ($400 per credit hour), and a full-time student takes 30 credit hours per year. Fixed costs of administering the scholarship program are $600,000 per year.
REQUIRED
1. How many athletic scholarships can Huron University offer each year?
2. Suppose the total budget for the following year is reduced by 20%. Fixed costs are to remain the same. Calculate the number of scholarships that Huron can offer in the following year.
3. As in requirement 2, assume a budget reduction of 20%. Fixed costs are to remain the same. If Huron wanted to offer the same number of scholarships as it did in requirement 1, how much reduction in tuition would it be able to offer to each student who receives a scholarship?