Jennifer Ozman is a sales engineer at Montana Chemical Engineering Company. Jenn

Question

Jennifer Ozman is a sales engineer at Montana Chemical Engineering Company. Jennifer owns two vehicles, and one of them is entirely dedicated to business use. Her business car is a used small pick-up truck, which she purchased with $ 11,000 of personal savings. On the basis of her own records and with data compiled by the U.S. Department of Transportation. Jennifer has estimated the costs of owning and operating her business vehicle for the first three years as given in Table P6.27. If her interest rate is 7%, what should be Jennifer's reimbursement rate per mile so that she can break even?

Explanation / Answer

Year 1 Year 2 Year 3 Total Costs 4,680.00 3,624.00 3,421.00 Add : Interest Expense 770.00 770.00 770.00 Total Costs 5,450.00 4,394.00 4,191.00 Expected Miles Driven 14,500.00 13,000.00 11,500.00 Break Even Point is the point of No Profit No Loss Hence, reimbursement / mile 0.38 0.34 0.36

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.