Pierre Rizzo is considering purchasing a new car. The price of the car is $60000, and Pierre hopes to keep it 4 years and then sell it for $19000. Based on past experience, Pierre drives about 12,000 km pe apartment where they must pay a $63 per month parking fee. Pierre has budgeted the following automobile expense items for the next 4 years: Expense Gasoline(13.7L Per 100KM) ($1.71 Per Liter) Licence/Registration Insurance Maintenance Cost Fixed/Variable Variable $483 Fixed $3309 Fixed $960 Variable

Pierre Rizzo is considering purchasing a new car. The price of the car is $60000, and Pierre hopes to keep it 4 years and then sell it for $19000. Based on past experience, Pierre drives about 12,000 km pe apartment where they must pay a $63 per month parking fee. Pierre has budgeted the following automobile expense items for the next 4 years: Expense Gasoline(13.7L Per 100KM) ($1.71 Per Liter) Licence/Registration Insurance Maintenance Cost Fixed/Variable Variable $483 Fixed $3309 Fixed $960 Variable

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

Pierre Rizzo is considering purchasing a new car. The price of the car is $60000, and Pierre hopes to keep it 4 years and then sell it for $19000. Based on past experience, Pierre drives about 12,000 km per year and lives in a downtown
apartment where they must pay a $63 per month parking fee.Pierre has budgeted the following automobile expense items for the next 4 years:
Expense
Gasoline(13.7L Per 100KM)($1.71 Per Liter)
Licence/Registration
Insurance
Maintenance
Tires ($1407 per set that last 42000KM)
Parking (48 Months)
Interest
Depreciation (STRAIGHT LINE)
Cost
Fixed/Variable
Variable
$483
Fixed
$3309
Fixed
$960
Variable
Variable
$3024
Fixed
$3090
Fixed
Fixed
CALCULATE THE FOLLOWING USING THE ABOVE INFORMATION:
TOTAL FIXED COSTS (TFC)
TOTAL VARIABLE COSTS (TVC)
TOTAL KMS
TOTAL COSTS (TC)
48000KM
AVG. FIXED COSTS/KM
AVG. VARIABLE COSTS/KM
S
AVG. TOTAL COSTS/KM
S

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Pierre Rizzo is considering purchasing a new car. The price of the car is $60000, and Pierre hopes to keep it 4 years and then sell it for $19000. Based on past experience, Pierre drives about 12,000 km per year and lives in a downtown apartment where they must pay a $63 per month parking fee. Pierre has budgeted the following automobile expense items for the next 4 years: Expense Gasoline(13.7L Per 100KM)($1.71 Per Liter) Licence/Registration Insurance Maintenance Tires ($1407 per set that last 42000KM) Parking (48 Months) Interest Depreciation (STRAIGHT LINE) Cost Fixed/Variable Variable $483 Fixed $3309 Fixed $960 Variable Variable $3024 Fixed $3090 Fixed $ Fixed CALCULATE THE FOLLOWING USING THE ABOVE INFORMATION: TOTAL FIXED COSTS (TFC) TOTAL VARIABLE COSTS (TVC) TOTAL COSTS (TC) TOTAL KMS AVG. FIXED COSTS/KM $ AVG. VARIABLE COSTS/KM $ AVG. TOTAL COSTS/KM $ 48000KM
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