11-4. A firm is trying to decide between two types of trucks, one a conventional gasoline vehicle and the other a diesel powered vehicle. The following information is available. (11.2)
Gasoline Diesel Initial investment $32,000 $27,000 Useful life 5 years 4 years Salvage value $12,000 $8,000 Operating cost per mile $0.48 $0.36

a. With interest at 4% per year, determine the annual mileage at which the two trucks are equivalent.

b. For 20,000 miles per year in travel, which truck should be recommended?