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Wren is a consultant who is going from Philadelphia to Washington for a three-day seminar. She is undecided whether to drive to Washington or take the train. She has listed the following costs relative to her trip:

The cost of the seminar will be $420 per day for each of the three days;

Her room will cost $220 per night for each of two nights;

The round trip train fare would be $140;

Meals will cost $50 per day;

If she takes the train, she expects that she will also have to spend a total of $40 on Metro (Washington mass transit) and taxi fares during the three days that she is in Washington;

Wren’s car gets 30 miles to the gallon, and she figures that she would drive a total of 280 miles if she takes her car. Gasoline prices are $2.40 per gallon.

Wren paid $27,000 for her car in 2013, and expects that it will last a total of ten years.

The expense related to wear and tear on her car will be negligible if she drives;

Wren’s car insurance is $700 every six months;

Wren pays an average of $350 for maintenance and repairs on her car each year, and does not expect the amount for this to increase if she drives to Washington;

If Wren drives, she will spend a total of $20.00 on tolls during the three days (Thanks, Delaware!);

If Wren drives, she will pay $30 to park her car for each of the three days of the seminar;

If Wren takes the train, she expects that she will be able to spend three hours working on client projects with her laptop while she rides the train. Wren bills her customers $75 per hour for her services.

Based on the above, should Wren take the train to Washington or drive? Identify all costs that are relevant.

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M92043166

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