hi i do not understand this part:
"Cost per trip = (420k / 300k + 0.5) * 10 + 10,500 / 350 / 10 + 20 * 1 = £61
Difference against a double-decker = 105-61 = £44 per trip
Number of trips to payback the investment = 420k / 44 = ~9,500"
what is done with the double deck buses and why we use the difference in cost to calculate payback. Furtheremore revenu from tickets sale is not taken into account in payback calculation
Thank you Luca for your explanation. I still do not understand why we use the cost saving (Y-Z) to payback the initial investment. We have the exhibit 2 - showing all the passengers in each route/hour, and we have the # of hours, and thus we can calculate the revenue per day. Assume the total number of passengers are the same after change the bus, we can have the revenue X/day. Then use 420k/(X-cost) to obtain the days (m) for payback. use m/350 to get the year.