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…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 2P

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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
Two plans are available for a company to obtain automobiles for its salesmen. How many miles must the cars be driven each year for the two plans to have the same costs? Use an interest rate of 10%. Plan A: Lease the cars and pay PO.35 per mile. Plan B: Purchase the cars for P11,201 and economic life of three years after which it can be sold for P1,912. Gas and oil cost P0.06 per mile. Insurance is P500 per year.
The rental cost of renting a machine that is $20,000 per year plus $0.70 per machine hour of use during the year, is an example of a mixed cost. True False
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
ABC Taxi has an average fixed cost of $8,000 a year for each car. Each mile driven has variable cost $.40 and collect fares of $.60. How many miles a year does each car have to travel before making profit?
Anderson Inc. uses packing machines to prepare their product for shipping One machine costs $136,000 and lasts about 5 years before it needs to be replaced. The operating cost per machine is $6.000 a year ignoring taxes, what is the equivalent annual cost of one packing machine if the required rate of return is 12%? Multiple Choice $43,208 $51.036 $43728
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.)
suppose you sell 8,000 of the 3 pack lenses described in question 3 above in one year. You cost on each 3 pack is $29.95 and you sell them for $59.95. if your operating expenses for the year total $144.080, what are your Net Income and Net profif margin percentage?
1. ABC Taxi has an average fixed cost of $8,000 a year for each car. Each mile driven has variable cost $.40 and collect fares of $.60. How many miles a year does each car have to travel before making profit? a. ABC company is contemplating adding a new line of product, which will require leasing new equipment for a monthly payment of $12,000. Variable costs would be $15.00 per product, and selling price per product is $40. What would be profit or loss if business sell 600 of these products? b. If 800 quantity of products can be sold, and a profit target is $10,000, what price should be charged for each product?
Data for two 50-h motors are follows: Alpha Motor Beta Motor Original Cost Annual Maintenance 37,500 48,000 1,500 750 Life, years Efficiency Taxes and Insurance 10 10 87% 87% 3% 3% Power cost is 2.00 per kWh. If money is worth 20%, how many hours per year would the motors have to be operated at full load for them to be equally economical? If the expected number of hours of operation per year exceeds the break-even point, which motor is more economical? (Use ROR and AC and draw the breakeven chart)
Max's Brakes is introducing a new revolutionary brake-pad for vehicles that will never wear out. Max's will sell the pads for $100 a pair and they will cost $80 in variable costs to produce. If cash fixed expenses are $1,500 per year and the depreciation and amortisation expenses are $600 per year, then what is the Accounting Operating Profit Break-Even point for Max's? a. 8 pairs b. 21 pairs c. 75 pairs d. 105 pairs

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