Mr Harry is a travelling inspector for the Environment Protection Agency. He used his own car and the agency reimburses him at Rs. 1.80 per km. Mr Harry claims he needs Rs. 2.20 per km just to break-even. A scrutiny of his expenses by the agency reveals the following:

Petrol is Rs. 5 a litre and Harry gets 8 km a litre in his car. When Harry is on the road, he averages 192 km a day.
He works 5 days in a week, has 10 vacations in a year, besides six holidays and spends 15 working days a month, in the offi ce.
You are required to determine

(a) An equitable rate of reimbursement based on the schedule he presently follows.

(b) The number of km a year he would have to travel to break-even at the current rate of reimbursement.

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Oil change every 4,800 km Maintenance (other than oil) every 9,600 km Yearly insurance (comprehensive with accident benefits) Cost of car, with an average residual value of Rs. 60,000 and with a useful life of 3 years Rs. 120 1,800 4,000 1,08,000