If farebox revenue is 100 and operating expenses are 500, what is the farebox recovery ratio?

• A. 0.60
• B. 0.40
• C. 0.80
• D. 0.20

Answer: (D)

The concept is the share of operating costs covered by fare revenue. It’s found by dividing farebox revenue by operating expenses.

Here, 100 divided by 500 equals 0.2, which is 20%. So the farebox recovery ratio is 0.20. This means fare revenue covers 20% of operating costs, with the remaining 80% funded from other sources. If expenses were different, the ratio would change accordingly (e.g., higher expenses with the same revenue lowers the ratio; lower expenses would raise it).