Two plans are available for a company to obtain automobiles for its salesmen. Plan A: Lease the cars and pay P0.28 per mile. Plan B: Purchase the cars for P6415. Each car has an economic life of three years, after which itcan be sold P1999. Gas and oil cost P0.05 per kilometer. Insurance is P50,000 per year. A. 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%. (Hint: Use EUAC Method)
Two plans are available for a company to obtain automobiles for its salesmen. Plan A: Lease the cars and pay P0.28 per mile. Plan B: Purchase the cars for P6415. Each car has an economic life of three years, after which itcan be sold P1999. Gas and oil cost P0.05 per kilometer. Insurance is P50,000 per year. A. 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%. (Hint: Use EUAC Method)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter14: Pricing Techniques And Analysis
Section: Chapter Questions
Problem 1.1CE: What life cycle cost concept begins raising concerns by year 5 with any electric vehicle (EV)? If...
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Two plans are available for a company to obtain automobiles for its salesmen. Plan A: Lease the cars and pay P0.28 per mile.
Plan B: Purchase the cars for P6415. Each car has an economic life of three years, after which itcan be sold P1999. Gas and oil cost P0.05 per kilometer. Insurance is P50,000 per year.
A. 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%. (Hint: Use EUAC Method)
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