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1. X-Kyoto is a passenger transportation companies in Kyoto. X-Kyoto has 30 transportation cars (e.g., buses with different sizes and cabs). There are 30 drivers and 10 office persons, on average, each of them works 8 hours per day and 220 days per year, with a wage of 3,000 yen per hour. On average, each car is worth 6 million yen. Now, 50 trips are average for each car per day with average four kilometers for each trip to carry passengers. Maintenance fees are \100 per km. Passengers pay \200 as a fixed fee plus \300 per km as they are transported with a car. To reduce empty trip (i.e., driving without a passenger), last year X-Kyoto signed a contract with an online cab distribution company DiDaDi, which helped reduce the empty ratio from 50% to 10%. X-Kyoto has to pay DiDaDi \30,000 for each of its car per month, which is considered as an investment capital by the CEO of X-Kyoto because the shortest contract period is 5 years. There are experts from taxi industry oppugn the high expense charged by DiDaDi. You are hired as a consultant by DiDaDi to analyze the operations and financial data of X-Kyoto to show the benefit of using car distribution online systems. To implement this project, you have to answer the following questions.

1. Create a ROIC (Profit/Capital) tree.

2. Populate the tree with numbers.

3. What is the current ROIC in percentage? (Note: profits should be annualized.)

4. What is the profit per day before X-Kyoto signing the contract with DiDaDi? (Suppose the average trip distance with a passenger for a car was the same as today.)
5. Based on the results above, you have confidence to show that the online car distribution system is highly profitable for taxi industry. You further want to calculate the non-empty ratio of a car that achieves breakeven, what is the ratio in percentage for X-Kyoto?

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