Prakash Transport Company has been given a route of 20 KMs long to run a bus. The
Question:
Prakash Transport Company has been given a route of 20 KMs long to run a bus. The bus costs the company a sum of Rs. 50,000. It has been insured at 3% per annum and the annual tax will amount to Rs. 1,000, garage rent is Rs. 100 per month. Annual repairs will be Rs. 1,000 and the bus is likely to last for 5 years
The driver’s salary will be Rs. 150 per month and the conductor’s salary will be Rs. 100 per month in addition to 10% of the takings as commission (to be shared by the driver and conductor equally). Cost of stationery will be Rs. 50 per month. Manager-cum-accountant’s salary is Rs. 350 per month. Petrol and oil will be Rs. 25 per 100 KM. The bus will make 3 round trips every day carrying on an average 40 passengers on each trip.
Assuming 15% profit on takings, calculate the bus fare to be charged from each passenger. The bus will run on an average 25 days in a month.
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt , Eugene F. Brigham