Question
Calculate the total life cycle cost for vehicle A and B, respectively. Calculate the break-even point in miles between the two vehicles. Based on the
Calculate the total life cycle cost for vehicle A and B, respectively.
Calculate the break-even point in miles between the two vehicles.
Based on the break-even mileage in the question, calculate the payback period in years.
Some information about two vehicles A and B, is provided in the table below.
Vehicle | A | B |
Vehicle Purchase Cost | $24,000 | $30,000 |
Vehicle Operating Cost Per Mile | $0.15 | $0.1375 |
Useful Life of Vehicle (years) | 10 | 10 |
Miles Per Year | 15,000 | 15,000 |
Miles Per Gallon | 30 | 40 |
Average Fuel Price Per Gallon | $4.5 | $4.5 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the total life cycle cost for vehicles A and B we need to consider the vehicle purchase cost and the operating cost over the useful life of the vehicle For Vehicle A Vehicle Purchase Cost ...
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Step: 2
Step: 3
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Cost Management A Strategic Emphasis
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
6th Edition
78025532, 978-0077523732, 77523733, 978-0078025532
