AutoSave OFF Document3 Home Insert Draw Design Layout References Mailings Review View Tell me Share Comments Calibri (Bo... 12 ' Aa v A 2 T AaBbCcDdEe v AaBbCcDdEe AaBbCcDc AaBbCcDdE! AaBbc AabbCcDdEx Heading 1 Heading 2 Paste B 1 U ab x x ADA Normal No Spacing Title Subtitle Dictate Styles Pane Sensitivity Cape Breton Railway ("CBR") is a new, federally funded railway company that plans to reintroduce passenger rail service from Halifax to Cape Breton. It has come to you for some financial analysis and advice to help them decide whether to resume operations that were halted years ago. As Cape Breton is a relatively depressed area, there will only be economy class seats offered. The ticket price and costing data are: Average full passenger fare Number of seats on the train Average load factor (% seats occupied) Average variable cost per passenger Fixed operating costs per month Tax rate $100 300 60% $20 $600,000 30% REQUIRED: (Show all calculations) All parts are independent unless stated otherwise. 1. Calculate the BEP in sales dollars and passengers per month. 2. What is the BEP in number of trains per month? 3. If CBR raises its full passenger fare by 15%, it is expected that the load factor will decrease to 45%. What would be the BEP in number of trains if this change was made? 4. Based on the proposed changes in Part 3, what would be the effect on income per train of this change? You must calculate the dollar effect on income. REFER TO THE ORIGINAL DATA FOR PARTS 5 & 6. 5. The president is concerned about the price of diesel fuel. If the company expects the variable costs to increase by 20% and it hopes to have an after-tax profit equal to 12% of sales, calculate the amount of sales dollars required to meet this target. 6. If the company wished to earn an after tax profit of $40,000 calculate the amount of sales dollars required to meet this target. Page 1 of 1 281 words LEX English (Canada) Focus 141% AutoSave OFF Document3 Home Insert Draw Design Layout References Mailings Review View Tell me Share Comments Calibri (Bo... 12 ' Aa v A 2 T AaBbCcDdEe v AaBbCcDdEe AaBbCcDc AaBbCcDdE! AaBbc AabbCcDdEx Heading 1 Heading 2 Paste B 1 U ab x x ADA Normal No Spacing Title Subtitle Dictate Styles Pane Sensitivity Cape Breton Railway ("CBR") is a new, federally funded railway company that plans to reintroduce passenger rail service from Halifax to Cape Breton. It has come to you for some financial analysis and advice to help them decide whether to resume operations that were halted years ago. As Cape Breton is a relatively depressed area, there will only be economy class seats offered. The ticket price and costing data are: Average full passenger fare Number of seats on the train Average load factor (% seats occupied) Average variable cost per passenger Fixed operating costs per month Tax rate $100 300 60% $20 $600,000 30% REQUIRED: (Show all calculations) All parts are independent unless stated otherwise. 1. Calculate the BEP in sales dollars and passengers per month. 2. What is the BEP in number of trains per month? 3. If CBR raises its full passenger fare by 15%, it is expected that the load factor will decrease to 45%. What would be the BEP in number of trains if this change was made? 4. Based on the proposed changes in Part 3, what would be the effect on income per train of this change? You must calculate the dollar effect on income. REFER TO THE ORIGINAL DATA FOR PARTS 5 & 6. 5. The president is concerned about the price of diesel fuel. If the company expects the variable costs to increase by 20% and it hopes to have an after-tax profit equal to 12% of sales, calculate the amount of sales dollars required to meet this target. 6. If the company wished to earn an after tax profit of $40,000 calculate the amount of sales dollars required to meet this target. Page 1 of 1 281 words LEX English (Canada) Focus 141%