^ I would say that the obvious flaw may be in paying for water and power bars. Water is basically free, and power bars are an expensive form of calories.
One has to add extra calories for cycling if no weight gain/loss is assumed. However, the possibly hidden assumption is that the cyclist would not be excercising otherwise, or his/her non-cycling excercise remains constant. It also neglects the medical benefits of excercise, which will eventually translate into cost savings.
And team katana - thanks for looking it up. I'll check back for the reference.