A firm is interested in developing a ?Decision Table? to help sales managers manage their employee transportation expenses.Such a decision table will be used managers to determine whether an employee should be provided a new leased car, a new purchased car or pay the employee for miles driven.

The car considered for acquisition is a well-equipped 2017 Chevy Malibu.It can be purchased or leased, and the car is expected to be replaced once in three years.Three alternatives are being considered.The details are provided below.

Employee Reimbursement: The sales person would submit monthly expense report indicated the mileage used for business.The firm will reimburse at 70 cents per mile.Employee will not be reimbursed for any other expenses.

Purchase Alternative:Purchase the car for $32,000 inclusive of sales tax, title fees, etc.The expected resale value of the car is $18,000 at the end of 3 years.The resale value will go down by $0.12 for every mile driven in excess of 36,000 miles.If the miles driven is less than 36,000 miles, the resale value will not change.

Lease Alternative:Initial down payment including ?bank fee? is $2,900.Lease term = 36 months.Monthly lease payment (payable beginning of month) is $330.Miles allowed is 36,000 over the 36-month lease period.Payment at lease termination is $2,000 to prepare the vehicle for sale to a different customer; that payment is due at the end of 36^th month.Charge for excess mileage is 45 cents per mile inclusive of taxes.The excess mileage charges are due to the dealership at the end of the lease term (end of 36^th month).The lease contract does not allow you to buy the vehicle at the end of lease termination.

You need to compute Present Value Cost of using the vehicle over a 3-year period for the above three mutually exclusive alternatives.Interest Rate is 8.40 percent /year Compounded Monthly.

Other Assumptions:

1) Chevy Malibu has a fuel efficiency rating of 20 mpg (combined city and highway)

2) Average price of the gas is assumed to be $3.00/gal

3) Car maintenance charges are too small and thus ignored.The firm will not pay for car wash.

• Present the results in a table similar to the one shown below.Show all results in $000 to single decimal place accuracy, except for monthly gasoline cost which should be shown to whole dollar accuracy.
• Show the results as line graphs with x-axis showing the miles driven and the y axis showing the monthly costs.Show cost as a positive number; it is ok to do that since we know that this problem is a cost only problem without any revenues.