Question

Collings College has annual fixed operating costs of $12,500,000 and variable operating costs of $1,000 per student. Tuition is $8,000 per student for the coming academic year, with a projected enrollment of 1,500 students. Expected revenues from endowments and federal and state grants total $250,000. Determine the amount the college must obtain from other sources.

Answer 1

Answer:

2,575,0000

Explanation:

The Fixed cost will remain fixed i.e : $12500000.

The variable cost is $1000 per student and the projected enrollment is 1500 students, hence the total variable cost is: 1000*1500 = $1500000.

The tuition fee is $8000 per student and projected enrollment is 1500 students, hence the total tuition fee will be: 8000*1500 = $12000000.

Hence the total cost is : 12500000+1500000+12000000 = 26000000.

The College received grants equalled to = 250000.

Hence the required amount is = 26000000-250000 = 25750000.

Hope this Helps

Thank You.