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The economics of a private school in Dubai
The prompt
An illustrative private school in Dubai has capacity for 1,500 students and is 80 percent full. The average fee is AED 45,000 a year. It keeps a student-teacher ratio of 12 to 1 and pays each teacher AED 180,000 a year in total cost. Other staff (teaching assistants, administration, and support) cost AED 9.6 million, rent is AED 8 million, and other costs are AED 7 million. What are revenue and EBITDA, and what happens at 60 percent utilization if the school keeps the same ratio?
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