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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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
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).
5. The average car depreciates at a rate of 20% the first year after purchase and 15% every year thereaften If the original purchase price of a car is $25,000, which of the following functions fO models the worth of a car, in dollars, tyears after its purchase? A) () 20,000(1-0.15) OB) /()= 20,000(1-0.15) CY F-25,000(1-0.20)" OC) f)= O D) f 25,000(1-0.15)' astant, s mis
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
The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $6,250. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 24,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) Average fixed cost per mile Variable operating cost per mile Average cost per mile 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above relevant in this decision? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be…
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%.
Еxample: Determine the probable cost per hour for owning and operating a truck with rubber tires after renting it for 6 month with an option to buy it later. Make use of the following information: Actual truck cost $50000 $10000 160 hp tires cost Engine Crankcase capacity Hours between oil changes Operating factor Useful life 60 liter 80 hr 50% б уears Operating hours per year Rental period Rental charges per month Tires useful life 2000 6 months $2500 5000 hr Maintenance for truck (60% of truck's Depreciation) Maintenance for tires (15% of tires' Depreciation) Investment (12% of Average Value) Cost of fuel per liter Cost of oil per liter 0.25 $/liter 1.50 $/liter
Car A initially costs $500 more than Car B, but it consumes 0.04 gallon/mile versus 0.05 gallon/mile for B. Both vehicles last 8 years, and B’s salvage value (the value when it is traded in after 8 years) is $100 smaller than A’s. Fuel costs $2.40 per gallon. Other things being equal, at how many miles of use per year (X) is A preferred vs. B?
The initial cost of a van is $22,800; its salvage value after 5 years will be $8500. Maintenance is estimated to be a uniform gradient amount of $225 per year (with no maintenance costs the first year), and the operation cost is estimated to be 36 cents/mile for 400 miles/month. If money is worth 6%, what is the approximate equivalent uniform annual cost (EUAC) for the van, expressed as a monthly cost?

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