KASuppose that two certain cars have the following average operating and ownership costs.Car AOperating$0.26$0.12Car BIf you drive 30,000 miles per year, by how much does the total annual expense for Car A exceed that of Car B over seven years?The total annual expense for Car A exceeds that of Car B by $(Round to the nearest dollar as needed.)over seven years.Average Costs per MileOwnership$0.72$0.31ATotal$0.98$0.43

Answer:- Expense meaning:- Expenses are simply another word for the cost. The operational costs…

Answered: Suppose that two certain cars have the…

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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3. A used car M costs $4,900.00 and operating costs are 11 cents per mile. At the end of 5 years you estimate its selling price to be $1,500.00. Another used car N costs $6,000.00 and operating costs are 9 cents per mile. At the end of 5 years you estimate the selling price to be $X. Assume you will be driving 15,000 miles per year. Determine the value of X so the two cars are equally worth to you at i=7%.
You have gathered the following vehicle costs: Vehicle Costs $ 2,600 Annual mileage $ 960 Miles per gallon $ 1,110 Average gasoline price $ Annual depreciation Current year's loan interest 18,300 24 Insurance 2$ 3.10 per gallon 2$ 448 License and registration fees Parking/tolls 73 Oil changes/repairs $ 491 (a) Calculate the annual variable and fixed costs of the vehicle. (Round answer to nearest whole number.) Variable & Fixed Costs Annual variable cost Annual fixed cost (b) Compute the operating cost per mile. (Enter your answer in cents rounded to 1 decimal place.) Operating cost cents per mile
Your company is deciding whether to purchase a durable delivery vehicle or a short-term vehicle. The durable vehicle costs $25 000 and should last five years. The short-term vehicle costs $10 000 and should last two years. If the cost of capital for the company is 15 per cent, then what is the equivalent annual cost for the best choice for the company? (Round to the nearest dollar.) $6151, short-term vehicle $5000, either vehicle $7458, long-term vehicle $5000, short-term vehicle
Looking for relevant cost when leasing a vehicle at $330 a month, plus $2 per mile over 10.000 miles per year, 2 year lease, insurance is $210 per month, operating cost is $0.20 per mile, and expected mileage is 17,700. What is the relevant cost?
You have just bought a new pusher dozer for your equipmentfleet. Its cost is $100,000. It has an estimated servicelife of four years. Its salvage value is $12,000.a. Calculate the depreciation for the first and second yearusing the straight-line and DDB methods.b. The IIT components of ownership cost based on averageannual value are:Tax: 2%Insurance: 2%Interest: 7%What cost per hour of operation would you charge tocover IIT?
Consider a machine that initially cost $6,000 and has these estimated annual expenses and market value: End of year Annual expenses, $ 2,000 2,000 2,000 3,000 3,000 Market value at end of Year, $ 5,200 4,200 1 2 3 3,200 2,200 1,200 4 5 If the MARR is 9% per year, determine its economic service life (Suppose an Economic Service Life occurs in the fourth or fifth year. Show Cash Flow Diagram for those years).
You have gathered the following vehicle costs Vehicle Costs Annual depreciation Current year's loan interest Insurance License and registration fees Parking/tolls Variable & Fixed Costs (a) Calculate the annual variable and fixed costs of the vehicle. (Round answer to nearest whole number.) Annual variable cost Annual fixed cost $3,600 Annual mileage $1,570 Miles per gallon $1,180 Average gasoline price S 68 011 changes/repairs $463 Operating cost 19,000 24 $ 3.70 per gallon S 465 (b) Compute the operating cost per mile (Enter your answer in cents rounded to 1 decimal place.) conts por milo
Jackson amp; Sons uses packing machines to prepare its products for shipping. One machine costs $178,000 and lasts about 5 years before it needs replaced. The operating cost per machine is $16,000 a year. What is the equivalent annual cost of one machine if the required rate of return is 12 percent? Select one: O O O O O a. $81,006.15 b. $65,378.93 c. $54,224.08 d. $79,004.12 e. $38,556.67
Baird Rentals can purchase a van that costs $110,000; it has an expected useful life of five years and no salvage value. Baird uses straight-line depreciation. Expected revenue is $40,425 per year. Assume that depreciation is the only expense associated with this Investment. Required a. Determine the payback period. Note: Round your answer to 1 decimal place. b. Determine the unadjusted rate of return based on the average cost of the investment. Note: Round your answer to 1 decimal place. (l.e., .234 should be entered as 23.4). a. Payback period b. Unadjusted rate of return years %
Oak Island Amusements Center provides the following data on the costs of maintenance and the number of visitors for the last three years. Number of Visitors per Year(thousands) Maintenance Costs($000) 1,830 $ 2,316 2,010 2,559 2,700 3,360 Required: a. Use the high-low method to estimate the fixed cost of maintenance annually and the variable cost of maintenance per visitor. (Enter your answers in dollars not in thousands of dollars. Round "Variable cost" answer to 2 decimal places.) b. The company expects a record 2,000,000 visitors next year. What would be the estimated maintenance costs? (Enter your answer in dollars not in thousands of dollars.)
1) A trucking company evaluates its fleet of vehicles. According to its balance sheet, a three- year- old van has the book value of $21,870. Currently its maintenance costs are $1,000 per year. They have increased by 20% annually and are expected to increase by the same percentage in the future. Calculate the equivalent annual costs for the first six years knowing that the van's purchase price was $30,000 and the minimum acceptable rate of return is P 15%.
13) A trucking company evaluates its fleet of vehicles. According to its balance sheet, a three- van has the book value of $21,870. Currently its maintenance costs are $1,000 per year. They have increased by 20% annually year-old and are expected to increase by the same percentage in the future. Calculate the equivalent annual costs for the first six years knowing that the van's purchase price was $30,000 and the minimum acceptable rate of return is 15%.

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