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A car rental company will select the best alternative among three alternative car models. The company assumes that one car travels approximately 150000 km in
A car rental company will select the best alternative among three alternative car models. The company assumes that one car travels approximately 150000 km in its useful life. Based on the previous year data, it is assumed that i liter of gas will cost 0.22 KD. The data below is provided for alternatives. All cars have the same properties but the engines and fuel consumptions are different. Car Purchasing price Fuel consumption Fuel tank capacity Maintenance cost (per 100 km) (liter) (per 10,000 km) Alternative 1 15000 KD 18 lt 79 lt 123 KD Alternative 2 15000 KD 24 lt 48 lt 152 KD Alternative 3 13000 KD 31 lt 48 lt 123 KD Note: use 2 digits for precision, in the following questions. Report your answers with 2 digits. b. What is the cost of Alternative 1? c. What is the cost of Alternative 2? d. What is the cost of Alternative 3? e. Which alternative is the best one? f. What would be the cost of Alternative 1 if the distance traveled per year is 375000 km in its useful lifetime? g. What would be the cost of Alternative 2 if the distance traveled per year is 375000 km in its useful lifetime? h. What would be the cost of Alternative 3 if the distance traveled per year is 375000 km in its useful lifetime? i. What would be the new decision? Explain Give your reasons 1 B
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