Your small remodeling business has two work vehicles. One is a small passenger c
ID: 2768413 • 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 $4.05 per gallon.
Suppose you drive the truck 11,280 miles per year. How many miles would you have to drive the car before upgrading the car would be the better choice? (Do not round intermediate calculations.)
Suppose you drive the truck 11,280 miles per year. How many miles would you have to drive the car before upgrading the car would be the better choice? (Do not round intermediate calculations.)
Explanation / Answer
CAR (before upgrade) : 12,000 miles / 25 mpg = 480 gallons 480 gallons / $4.050 per gallon = $118.51 (after upgrade) : 12,000 miles / 40 mpg = 300 gallons 300 gallons / $4.050 per gallon = $74.07 $118.51 - $74.07 = $44.44 savings with upgrade TRUCK (before upgrade) : 12,000 miles / 10 mpg = 1,200 gallons 1,200 gallons / $4.050 per gallon = $296.29 (after upgrade) : 12,000 miles / 12.5 mpg = 960 gallons 960 gallons / $4.050 per gallon = $237.04 $296.29 - $237.04.46 = $59.26 savings with upgrade
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