Replacement Decisions Your small remodelling business has two hydrogen-battery/petrol hybrid eco-vehicles. One is a small passenger car
Question:
Replacement Decisions Your small remodelling business has two hydrogen-battery/petrol hybrid eco-vehicles. One is a small passenger car used for jobsite visits and for other general business purposes. The other is a heavy truck used to haul equipment. The car gets 50 miles per litre. The truck gets 20 miles per litre. You want to improve petrol mileage to save money, and you have enough money to upgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgraded car will get 80 miles per litre; an upgraded truck will get 25 miles per litre. The cost of petrol is £1.09 per litre. Assuming an upgrade is a good idea in the first place, which one should you upgrade? Both vehicles are driven 12,000 miles per year.
Step by Step Answer:
Fundamentals Of Corporate Finance
ISBN: 9780077178239
3rd Edition
Authors: David Hillier, Iain Clacher, Stephen A. Ross