Peter lives 30 miles from his place of work. He drives his car to and from work five days a week, 48 weeks in the year. The total distance his car was driven last year, for both work and private use, was 18000 miles. He estimates his car expenses as follows:

Gas $0.08 per mile.

Parking $5 per day

Depreciation $2500 per year

Maintenance and repairs $600 per year

Insurance and registration $550 per year

Peter's workmate has asked him to give her a ride to and from work each day. Peter is not a close friend of this workmate and is personally indifferent about giving his workmate a ride. Even though giving his workmate a ride would add 6 miles each morning and each afternoon, Peter's travel time would not be any greater than it was at present because he would take a different route which would involve paying a bridge toll of $0.80 in each direction. Assume Peter would drive six miles and pick up his workmate and then drive the 30 miles to work (e.g. his daily miles would increase from 60 miles to 72 miles). Assume that depreciation and maintenance charges do not vary with the miles driven (these costs are fixed over the relevant miles driven by Peter).

Peters workmate has offered to pay Peter for this ride and has stated, Charge me the ride cost. Assume that Peter wants to be paid each day for the daily trip. How much should Peter charge his workmate (each day)? Provide specific numbers and calculations to support your proposal.

Does this simple example have any relevance for businesses and decision making?