Inflation, uncertainty, breakeven analysis As the employer of a company you face a choice of buying a company car for your employee to use, or reimbursing him/her on a mileage basis for use of his/her personal car. For the choice of buying and operating a company car, this would involve a purchase cost, an operating period, and a resale value after the operating period. There would be annual costs for insurance and license fee, and annual maintenance and repairs. Fuel costs would also be involved, as well as fuel consumption. The altemative to reimburse the employee for the use of his/her personal car; in that case the employee would be responsible for all vehicle costs, including fuel. Details are below. Vehicle purchase cost 55,000 Operating period, months 60 Resale value 10,000 Annual insurance, licence 3000 Annual maintenance/repairs 1000 Fuel cost/gallon 3.80 Fuel efficiency. mpg 45 Mileage reimbursement rate 0.58/mile Determine the breakeven miles/month, such that the employer would be indifferent, from a cost perspective, between buying and operating a company car, and reimbursing the employee for his/her use of a personal automobile Use MARR = zero