A bank intends to offer its financial services via the Internet. Customers with a personal computer and modem can request a transaction at any time. The bank needs to lease the equipment needed
At an annual cost of £15,000. Each transaction costs the bank £0.56p. It plans to charge customers
£0)75p for each transaction regardless of size. In order for the service to break even, how many
Customers must access the system each year?
A) 106,357
B) 78,947
C) 48,797
D) 63,127
E) 195,647

Question

Quizplus · Accepted Answer

To break even, the bank must cover the annual cost of the equipment lease (£15,000) through the profit made on each transaction. The profit per transaction is £0.75 - £0.56 = £0.19. To find the number of transactions needed to break even, divide the annual cost by the profit per transaction: £15,000 / £0.19 = 78,947.36. Rounding is not specified, but the closest whole number is 78,947.

A Bank Intends to Offer Its Financial Services Via the Internet