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Swati, a mini-bus operator has just entered into business. She needs your help in calculating and suggesting the fare per passenger-km from the following information:

Swati, a mini-bus operator has just entered into business. She needs your help in calculating and suggesting the fare per passenger-km from the following information:

i. Length of the route 30 kms

ii. Purchase price of the mini-bus Rs. 4 lacs

iii. Part of the above cost is meet by a loan, annual interest cost is Rs. 10,000/-

iv. Other Annual Charges

a. Insurance Rs. 15,000/-

b. Garage Rent Rs. 9,000/-

c. Road Tax Rs. 3,000/-

d. Repairs & Maintenance Rs.15,000/-

e. Administrative Charges Rs. 5,000/-

v. Running Expenses

a. Driver and Conductors Salary p.m. Rs. 5,000/-

b. Repairs//Replacement of tyre- tube p.a. Rs. 3,600/-

c. Diesel and Oil Cost per km Rs. 5/-

vi. Effective estimated useful life of vehicle is 5 years and estimated scrap value is Rs. 10,000/-.

vii. Mini- bus has 20 seats and is planned to make 6 two-way trips for 25 days per month.

Provide profit at 20% of total revenue

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