Airport taxi

• Daily revenue of one taxi is: (6*$80)+(18*$70)=$1,740.
• Annual revenue of 500 taxis are: (500*$1,740)*365=$317.5 m.

Keep in mind that this calculation implicitly assumes a 100% utilization which is alright for simplicity's sake. But it is actually not correct since supply exceeds demand in the daytime shift. A great candidate makes that point by calculating demand per hour and compares that to supply per hour (segmented in daytime and night). Here's a short calculation:

Supply: 2.100 taxis per hour in daytime and night (we assume non-stop driving taxis with 1h per ride)

Demand:

• Night: 50%*20%*84,000,000=8,400,000 passengers per year - 3,835 passengers per hour; (8,400,000/365/6hours)
• Daytime: 50%*20%*84,000,000=8,400,000 passengers per year - 1,278 passengers per hour; (8,400,000/365/18hours)

Result: During daytime the utilization is actually at 61% (1,278/2,100) which is quite below 100%. This could change the overall result a lot.

• Total payroll is 50%*$317.5 m=$158.8 m.
• Operating costs are $5,000*500=$2.5 m.
• Total license costs are $250,000*500=$125 m.

Total earnings over 1-year period: $317.5 m-$158.8 m-$2.5 m=$156.2 m.

ROI: (($156.2 m-$125 m)/$125 m))*100%=24.96%. So our return is an estimated 25% for the first year. Thereafter it will increase to 125% since license costs are not recurring.