Sheridan College of Puxton Park $($SCPP$)$ is trying to determine if it is more cost effective to reimburse employees for mileage in traveling to educational conferences or should the college purchase a vehicle to be used for employee travel to conferences. The following information has been provided with regards to the Necision:

Annual miles driven by employees to conferences

$32000$

Travel reimbursement rate per mile

$$\frac{0\mathrm{.}56}{m}i.$

Purchase price $-$ new vehicle $(5$ year useful life$)$

$$31000($no salvage value$)$

Annual Maintenance $-$ new vehicle

$$1200$

Annual vehicle insurance & registration

$$2700$

Given the quantitative information for the two options, which option would you select as most beneficial to SCPP and why?

The option to purchase the new vehicle should be selected with a total annual cost of $$6200$ whereas, the option to continue mileage reimbursement will cost $$17920.$

The option to purchase the new vehicle should be selected with a total annual cost of $$10100$ whereas, the option to continue mileage reimbursement will cost $$17920.$

The option to continue mileage reimbursement should be selected since it will only cost $$17920$ whereas, the option for the new vehicle will cost $$34900.$

The option to continue mileage reimbursement should be selected since it will only cost $$17920$ whereas, the option for the new vehicle will cost $$31000.$