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14 A company is considering three alternative proposals for conveyance facilities for its sales personnel who have to do considerable travelling, approximately 20,000 kilometres every

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14 A company is considering three alternative proposals for conveyance facilities for its sales personnel who have to do considerable travelling, approximately 20,000 kilometres every year. The proposals are as follows: (i) Purchase and maintain its own fleet of cars. The average cost of a car is Rs. 1,00,000. (ii) Allow the executive use his own car and reimburse expenses at the rate of Rs. 1.60 per kilometre and also bear insurance costs. (iii) Hire cars from an agency at Rs. 20,000 per year per car. The company will have to bear costs of petrol, taxes and tyres. The following further details are available : (1) Petrol : Re. 0-60 per kilometre. (2) Repairs and maintenance : Re. 0.20 per kilometre. (3) Tyre : 0:12 per kilometre. (4) Insurance : Rs. 1,200 per car per annum. (5) Taxes : Rs. 800 per car per annum. (6) Life of the car : 5 years with annual mileage of 20,000 kilometres. (7) Resale value : Rs. 20,000 at the end of the fifth year. Work out the relative costs of three proposals and rank them

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