Yuko Takase is a travelling inspector for Environment Canada. She uses her own car and the department reimburses her at $0.23 per kilometre. Yuko claims she needs $0.27 per kilometre just to break even. Shaun McHale, the district manager, looks into the matter and compiles the following information about Yuko’s expenses:

When Yuko is on the road, she averages 120 kilometres a day. McHale knows that Yuko does not work Saturdays or Sundays, has 10 working days’ vacation and six holidays, and spends approximately 15 working days in the office.
1. How many kilometres per year would Yuko have to travel to break even at the current rate of reimbursement?
2. What would be an equitable per-kilometre rate?

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Oil change every 3,000 kilometres Maintenance (other than oil) every 6,000 kilometres Yearly insurance Auto cost $13,500 with an average cash trade-in value of $6,000; has a useful life of three years Gasoline is approximately $0.60 per litre and Yuko averages 6 kilometres per litre $ 30 240 700