Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Jose's Pizza has one passenger van as delivery van. It is considering converting the passenger van to the cargo van. The conversion costs $4,000.

The Jose's Pizza has one passenger van as delivery van. It is considering converting the passenger van to the cargo van. The conversion costs $4,000. The ROI is 12%. The cargo van is able to load twice as many as the passenger van does, therefore it could run half as many miles as the passenger van does. The mileage per year for the passenger van is 21,000 miles. The fuel mileage is 15 miles per gallon for the passenger van and 10 miles per gallon for the cargo van. The cost per gas is $3 per gallon. The van is expected to be kept for 4 years. Is this converting project good one?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Econometrics

Authors: R Carter Hill, William E Griffiths, Guay C Lim

5th Edition

1118452275, 9781118452271

Students also viewed these Economics questions