Cullowhee, where WCU is located, does not have a commercial airport, residents must travel to Asheville to take commercial flights. WCU is looking into start a bus service from Cullowhee to Asheville Airport, with other stops in Candler and Waynesville. This service will operate 365 days per year and there will be 3 buses, with a seating capacity of 60, that will make the 3-hour round trip. These buses will be purchased at a cost of $350,000 each. Each bus will three make round trips per day (ignore any overtime in your cost calculations). The operating cost per hour (including fuel and salary for the driver) is estimated to be $150 per hour per trip. The planned fare per rider is $11, regardless of where they get on or get off the bus. Based on marketing surveys, it is estimated that an average of 40 passengers will ride the buses each trip. a) The University anticipates that this service will lose money, the first year. How much will they lose? Show your calculations. b) How many years will it take the service to break even, if at all, during the 6-year life span of the buses? Show your calculations. c) What would be the effect if they could increase the average number of riders to 45 passengers per trip? 50 passengers per trip? What would be the number of years to break-even (if they are able to break even) d) Assume that the University can get a grant for the purchase of the buses, how would this effect the financial loss in the first year? (assuming 40 passengers per trip). Show your calculations. e) What is your recommendation for starting this service? Are there other factors, besides cost, that should be considered?

*There is one answer available, but I don't believe it is correct. In solution a) is uses three buses in all answers except for operating expenses, which it only calculates for one bus. In solution b) the question asks for a break even point the answer provides profit in year 2. I would love to know how to solve these questions. I have the excel BEP template, but don't know what numbers to plug in to the Sales per unit, Fixed Cost, Variable cost per unit, and #of units. Even then, how how it transpose to use the What if analysis to find the year that the company will break even?