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A suburban taxi company is considering buying taxis with diesel engines instead of gasoline engines. The cars average 50,000 km a year

DIESEL:

Vehicle Cost: 13,000
Useful years in life: 3
Fuel cost per liter: 48 cents
Mileage in km/liter: 35
Annual Repairs: 300
Annual Insurance premium: 500
End of useful life resale value: 2,000

GASOLINE:

Vehicle Cost: 12,000
Useful years in life: 4
Fuel cost per liter: 51 cents
Mileage in km/liter: 28
Annual Repairs: 200
Annual Insurance premium: 500
End of useful life resale value: 3,000

Use an annual cash flow analysis to determine the more economical choice if interest is 6%

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M91646492

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