IMA EDUCATIONAL Case Journal Case Study The Association of Accountants and Financial Professionals in Business ISSN 1940204X Daddy Wants a Diesel or Does He? Keener/5 D. Macande Unions-Ely of Mary Wasigtorz INTRODUCTION Rebecca shook her head and gave a loud sigh as she hung up the phone from talking with her dad. \"What is it?\" her roommate Claire asked. \"Per usual, Daddy Jim wants me to use my 'schooling,' as he likes to call it, to help him decide whether to buy a new crew cab truck with either a diesel or a gas engine," Rebecca replied. \"Well, maybe he will forget all about it ifyou just wait him out,\" Claire offered. \"Oh no, you do not know him like I do. He will expect a full analysis, or I will never hear the end ofit! " \"'Well, maybe you will think twice before bragging to him about your examination scores in accounting after this,\" Claire said. \"You got that right! I will have to get on it right after my last nal, or there will be no peace over break,\" Rebecca responded. THE MODELS AND ENGINES Rebecca opened the last e-mail from her dad to nd the following information he compiled about the porch ase decision. Jim made it quite clear that he wanted a 4 x 4 to be able to get his boat up the steep, sandy ramp he used mDSt frequently. His friend, Kashef, had a late-model truck that impressed Jim very much. Any truck in this class that he chose would offer standard equipment, which is a huge step up from the 2012 Scion iQ he had bought when gas surged in 2012. However, Jim was not sure whether getting the standard engine (the V6), or paying extra for the V3 or Diesel made any sense. That is where Rebecca came in. Woodrow D. Richardson University omey Wasirzgfmz The engine choices were a 3.6-literV6 rated at 295 horsepower, a 3.0-liter diesel V6 rated at 240 horsepower, or a 5.7-liter V8 rated at 360 horsepower. All of the trucks were capable of pulling Jim's boat, a 17-foot Carolina Skiff thatweighed just short of 1,500 lbs. including the boat, motor, and gear. Vehicle mileage was one issue at hand, as well as Jim's driving habits. The V6's Environmental Protection Agency (EPA) rating was 17 city miles per gallon (MPG) and 25 highway MPG, while the diesel was rated 21 city MPG and 29 highway MPG. The V8 was rated at 15 city MPG and 22 highway MPG. The manufacturer suggested 89 octane fuel for the V8, but Jim indicated he would use 87 octane unless engine pinging became pronounced. The manufacturer's \"I3 uild and Price\" feature indicated that the V6 came standard, but the diesel was a $4,270 option, and a V8 was a $1,250 option. GAS AND DIESEL PRICES In his e-mail to Rebecca, Jim said diesel usually ran $0.25 more per gallon than unleaded gas. He was not sure whether this was accurate but thought it was in the ballpark. Rebecca wondered about this, since she had never paid attention to diesel prices in her own trips to fill up. She decided to check the price differential by visiting the US. Energy Information Administration website. See Table for the information she found. 'WithGut cornpuljng the averages, she noticed there was a premium for diesel compared with regular gasoline, as reported by the US. Energy Informaljon Administration averages.' Jim's estimate of$0.25 appeared a bit high. She noted that she could obtain more I\"Weekly Retail Gasoline and Diesel Prices," U.S. Energy Information Administration, Released February 2, 2018, WEE-3W W IMA EDUCATIONALCASEJOURNAL VOL.H,ND.1,ART.3, MARCH 2018 2018|MA
