A PhD student in engineering has been extended an invitation to visit a prospect

Question

A PhD student in engineering has been extended an invitation to visit a prospective employer 300 miles away from campus. The company will pay for all travel expenses including meals and other incidentals. The company reimburses at the rate of $0.45/mile if the travel is by car. A rental car company in town has a three-day special for $29.95 per day plus 8.75% taxes. Insurance costs will be $10/day. The mileage allowed is 200 miles per day. Additional miles will be charged at the rate of $0.25 per mile. Assume that the student could make the round trip in three days. That is the student would leave Saturday morning to go and visit the grandparents in a nearby town and leave Sunday after Church in time for evening dinner with a senior manager at the plant. After the interview on Monday, the student will leave town and get back to campus late Monday evening to teach a section of the Engineering Economy class on Tuesday morning. If gas costs $3.35 and the rental car will average 30 miles to the gallon, how much money will the student end up making if the side trip to visit the grandparents has added another 100 miles to the trip? Note the company will pay only for a maximum of 600 miles. Determine if it is worth renting a car for this trip instead of flying.

Explanation / Answer

Below are the results:

He should rent the vehicle, go to the job interview and make $39.12 extra that will be reimbursed for mileage while still visiting his relatives that are an additional 100 mile drive.

Mileage Reimbursement $                        270.00 Car Mileage 30.00 Cost per Gallon $                             3.35 Expenses 3 day Rental $                          89.85 Insurance $                          30.00 Taxes on Vehicle $                             7.86 Extra Mileage $                          25.00 Total Gasoline $                          78.17 Total Expenses $                        230.88 Money Made $                          39.12

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