A suburban taxi company is considering buying taxies with diesel engines instead of petrol engines. The cars average 60,000 km a year with a useful life of three years for taxi with the petrol engine, and four years for the diesel taxi. Other comparative data are as follows:

Diesel Petrol Vehicle cost (7) 390,000 360,000 Fuel cost per litre (7) 8 20 Mileage in km/lit 30 20 Annual repairs 9000 6000 Annual insurance premium 15,000 15,000 Resale value at the end of life (7) 60,000 90,000 Determine the more economical choice if interest rate is 20%.

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