Your small remodeling business has two work vehicles. One is a small passenger c
ID: 2631552 • Letter: Y
Question
Your small remodeling business has two work vehicles. One is a small passenger car used for job-site visits and for other general business purposes. The other is a heavy truck used to haul equipment. The car gets 25 miles per gallon (mpg). The truck gets 10 mpg. You want to improve gas mileage to save money, and you have enough money to upgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgraded car will get 40 mpg; an upgraded truck will get 12.5 mpg. The cost of gasoline is $3.60 per gallon.
Suppose you drive the truck 11,040 miles per year. How many miles would you have to drive the car before upgrading the car would be the better choice?
Explanation / Answer
For Truck
Intitial Cost = (Miles / mileage) = 11040/ 10 = 1104 gallons
New Cost = 11040/12.5 = 883.2
Savings = 1104 -883.2 = 220.8 gallons of gas
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Car upgarde would be profitable if the gasoline savings is higher compared to truck
Savings = Miles / (initial Mileage) - Miles / (Final Mileage)
= Miles/ 25 - Miles / 40 = Miles (1/25 - 1/40) = 0.015 * Miles
Car is a better upgared option if savings by car > saving from truck
=>> 0.015 Miles = 220.8
Miles= 220.8/ 0.015 = 14720
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