Hi i don't understand why we have to multiply 10 not 20 for 'number of miles per trip' in below equation. In exhibit 1, average miles per route is 20 right? Cost per trip = (Depreciation per mile + fuel per mile) * number of miles per trip + insurance cost per trip + labour cost Cost per trip = (420k / 300k + 0.5) * 10 + 10,500 / 350 / 10 + 20 * 1 = £61

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Anonymous A

on May 23, 2020

Global

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Hi i don't understand why we have to multiply 10 not 20 for 'number of miles per trip' in below equation.

In exhibit 1, average miles per route is 20 right?

Cost per trip = (Depreciation per mile + fuel per mile) * number of miles per trip + insurance cost per trip + labour cost
Cost per trip = (420k / 300k + 0.5) * 10 + 10,500 / 350 / 10 + 20 * 1 = £61

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Top answer

Ian

Coach

on May 23, 2020

Hi there,

I'm a bit confused by your question. It looks like you do multiply by 10 (see image below).

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2 comments

Anonymous

on May 23, 2020

Oops my bad. I have change the numbers in my question.

Esmee

on Jul 08, 2020

Hi there! I'd also like to know why we multiply by 10 and not by 20? The average miles per trip is 20 right?

Clara

Coach

on May 25, 2020

McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hey there!

Since this is an expert cse, I would recommend you to ping directly the author. He is on PrepL!

Hope it helps!

Cheers,

Clara

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