Frank Smith is considering purchasing a new car. The price of the car is $28000, and Frank hopes to keep it 4 years and then sell it for $11000. Based on past experience, Frank drives about 16,000 km per year and lives in a downtown apartment where they must pay a $49 per month parking fee.Frank has budgeted the following automobile expense items for the next 4 years: Expense Gasoline(6.6L Per 100KM)($2.11 Per Liter) Licence/Registration Insurance Maintenance Tires ($1288 per set that last 63000KM) Parking (48 Months) Interest Depreciation (STRAIGHT LINE) Cost $ 8912.640 $568 $2132 $2560 $1308.444 $2352 $1440 $ 17000 Fixed/Variable Variable Fixed Fixed Variable Variable Fixed Fixed Fixed ATC at D is: $2.88/KM TC at A is: $141000 Find the Marginal Cost between D and A (Answer to 2 Decimals and always positive)?$ If Price of an UBER RIDE is $1.8/KM: What is the number of KMs Driven by Frank? KM What is the total Revenue at this point? $ What is the total Cost at this point if AVC is $1.3 per KM? $ What is the Profit/Loss at this point? $

Frank Smith is considering purchasing a new car. The price of the car is $28000, and Frank hopes to keep it 4 years and then sell it for $11000. Based on past experience, Frank drives about 16,000 km per year and lives in a downtown apartment where they must pay a $49 per month parking fee.Frank has budgeted the following automobile expense items for the next 4 years: Expense Gasoline(6.6L Per 100KM)($2.11 Per Liter) Licence/Registration Insurance Maintenance Tires ($1288 per set that last 63000KM) Parking (48 Months) Interest Depreciation (STRAIGHT LINE) Cost $ 8912.640 $568 $2132 $2560 $1308.444 $2352 $1440 $ 17000 Fixed/Variable Variable Fixed Fixed Variable Variable Fixed Fixed Fixed ATC at D is: $2.88/KM TC at A is: $141000 Find the Marginal Cost between D and A (Answer to 2 Decimals and always positive)?$ If Price of an UBER RIDE is $1.8/KM: What is the number of KMs Driven by Frank? KM What is the total Revenue at this point? $ What is the total Cost at this point if AVC is $1.3 per KM? $ What is the Profit/Loss at this point? $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Instead of selling or getting rid thier car after 4 years, Frank decide to start using their vehicle in a business
Frank will be providing ride hailing service with their vehicle (UBER). See below for the graph of the total ar
average costs for the next 7 years. The total fixed costs are 30000 for this period.
Price Per KM($)
3.6
3.2-
2.8
2.4-
2
1.6-
1.2
0.8-
0.4
اه
130
A
C D
B
KM DRIVEN (000s KM)
PLEASE COMPLETE TABLE BELOW ONLY USING ABOVE INFORMATION
A = 47,000 KM
B = 59,000 KM
C = 71,000 KM
D = 77,000 KM

Frank Smith is considering purchasing a new car. The price of the car is $28000, and Frank hopes to keep it
4 years and then sell it for $11000. Based on past experience, Frank drives about 16,000 km per year and
lives in a downtown apartment where they must pay a $49 per month parking fee. Frank has budgeted the
following automobile expense items for the next 4 years:
Expense
Gasoline(6.6L Per 100KM) ($2.11 Per Liter)
Licence/Registration
Insurance
Maintenance
Tires ($1288 per set that last 63000KM)
Parking (48 Months)
Interest
Depreciation (STRAIGHT LINE)
Cost
$8912.640
$568
$2132
$2560
$ 1308.444
$2352
$1440
$ 17000
Fixed/Variable
Variable
Fixed
Fixed
Variable
Variable
Fixed
Fixed
Fixed
ATC at D is: $2.88/KM
TC at A is: $141000
Find the Marginal Cost between D and A (Answer to 2 Decimals and always positive)?$
If Price of an UBER RIDE is $1.8/KM:
What is the number of KMs Driven by Frank?KM
What is the total Revenue at this point? $
What is the total Cost at this point if AVC is $1.3 per KM? $
What is the Profit/Loss at this point? $

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