Edgestate University is trying to decide whether to allow 100 more students into the university. Tuition is $6000 per year. The controller has estimated the following schedule of costs to educate students:

Number of Students Total Costs

4100 30,300,000

4200 30,600,000

4300 30,900,000

4400 31,200,000

The current enrollment is 4200 students. The president of the university has calculated the cost per student in the following manner: $30,600,000/4200 students = $7286 per student. The president was wondering why the university should accept more students if the tuition to the university is only $6000 per student.

a. What is wrong with the president's calculation?

b. If the only choices are 4100, 4200, 4300, or 4400 students, how many students should the university admit?

c. Midstate university is almost identical to Edgestate in number of students, tuition, and operations, except their fixed costs are double the fixed costs of Edgestate. This is because a Midstate Alum donated a giant Mascot to Midstate, and the depreciation on the Mascot is fourty percent (40%) of their annual fixed costs. Which university is doing a better job managing their operations and their cashflow?

Midstate is doing better_____ Edgestate is doing better________

Neither is doing better than the other _____