A company is considering supplying employees with company cars. Employee travel is expected to be a total of 30,000 miles per year for all employees. Supplying employees with company cars would involve the following cost components: Car purchase: $22,000 with an estimated 3-year life Salvage value: $5000 Insurance cost: $1000/year Operating and maintenance expenses: $0.22 per mile The company uses a MARR of 10%. The total cos per mile of providing company cars to employees is:$ per mile (Round the answer to two decimal places. Do not enter the dollar symbol or the words per mile in you answer. If the number is a fraction less than one, include the leading zero in the answer. eg. 0.12) The company pays employees $0.40 per mile to use their own car. Compare this with the number you calculated in the previous question. The company should provide cars to its employees? Type Yes or No for the decision:

A company is considering supplying employees with company cars. Employee travel is expected to be a total of 30,000 miles per year for all employees. Supplying employees with company cars would involve the following cost components: Car purchase: $22,000 with an estimated 3-year life Salvage value: $5000 Insurance cost: $1000/year Operating and maintenance expenses: $0.22 per mile The company uses a MARR of 10%. The total cos per mile of providing company cars to employees is:$ per mile (Round the answer to two decimal places. Do not enter the dollar symbol or the words per mile in you answer. If the number is a fraction less than one, include the leading zero in the answer. eg. 0.12) The company pays employees $0.40 per mile to use their own car. Compare this with the number you calculated in the previous question. The company should provide cars to its employees? Type Yes or No for the decision:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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