Your small remodeling business has two work vehicles. One is a small passenger c
ID: 2711292 • 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 $3.70 per gallon. Assuming an upgrade is a good idea in the first place, which one should you upgrade? Both vehicles are driven 12,000 miles per year.
Explanation / Answer
From the following analysis, upgrading the truck seems to be more worthy
The truck when upgraded has more savings in cost. The revised running cost for truck per year come s to $ 3552. Considering that only the truck is upgraded, the total cost will be
Upgraded cost of truck + existing cost of car = 3552+1776 = $ 5328 which is less than the combined current cost of $6216
Car Truck Total Total running miles 12000 12000 Current mpg 25 10 Fuel required gallons 480 1200 Cost per gallon 3.7 3.7 Current running cost 1776 4440 6216 Upgraded fuel efficiency mpg 40 12.5 Fuel required gallons 300 960 Upgraded runniing cost 1110 3552 4662 Difference in cost 666 888 1554Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.