1. The LIRR is a passenger transportation company in New York City. The LIRR has 30 different trains in its fleet. There are 30 drivers and 10 office persons working for the LIRR. On average, each of them works 8 hours per day and 220 days per year, with a wage of $30.00 per hour. On average, each train is worth $60000.00. Each Train takes 50 trips per day and travels on average four kilometers per trip. Maintenance fees are \$1.00 per km. Passengers pay \$2.00 as a fixed fee plus \$3.00 per km as they are transported by train. To reduce empty trains last year, The LIRR signed a contract with an online reduced fare ticket site, ETrax, which helped reduce the empty train ratio from 50% to 10%. The LIRR has to pay ETrax \$300.00 for each of its cars per month, which is considered as an investment capital by the CEO of The LIRR because the shortest contract period is 5 years. Experts from the transit industry question the high expenses charged by ETrax. You are hired as a consultant by ETrax to analyze the operations and financial data of The LIRR, seeking to show the benefits LIRR receives from using ETraxs services. To accurately answer this question, you have to answer the following questions:

1. Create a ROIC (Profit/Capital) tree.

2. Populate the tree with numbers.

3. What is the current ROIC in percentage? (Note: profits should be annualized.)

4. What is the profit per day before The LIRR signs the contract with ETrax? (Suppose the average trip distance with a passenger for a car was the same as today.)

Based on the results above, you are confident that ETrax is a highly worthwhile partnership for the LIRR. To further prove your point, calculate the non-empty ratio of a car that achieves breakeven. What is the ratio in percentage for The LIRR?