A Southern Georgia school district is considering ordering 52 propane-fueled sch

Question

A Southern Georgia school district is considering ordering 52 propane-fueled school buses. "They're healthier, they're cleaner burning, and they're much quieter than cueel opiid a school admmis a00 for a the diesel option," said a school administrator. Propane-powered buses also reduce greenhouse gasses by 24% compared to gasoline-powered buses and 9% compared to diesel ones. But they come at a premium $101,000 for a propane model, $10,000 more than the diesel equivalent. The propane bus operating cost (above and beyond fuel cost) is 27 cents/mile, compared to 36 cents for the diesel. Diesel fuel costs about $3/gallon in Georgia, about $1 more than propane. Bus mileage is 14 mpg for the propane model vs. 13 mpg for diesel. The life of a school bus in the district averages 11 years, and each bus travels an average of 35,000 miles per year because the district is so large and rural. Which bus is the better choice based on a life-cycle analysis? The total cost of using one propane-fueled bus during its life cycle is S(Round your response to the nearest dollar.)

Explanation / Answer

Life-cycle analysis of a propane-fuelled bus:

Life-cycle costs = Purchase costs + Total operating cost + Total fuel cost

Purchase cost = $101000

Total operating cost = Operating cost per mile x Total bus life x Average distance per year

Total operating cost = 0.27 x 11 x 35000 = 103950

Total fuel cost = (Total distance travelled / Bus mileage) x Per gallon fuel cost

Total fuel cost = [(35000 x 11) / 14)] x 2 = 55000

Life-cycle costs of a propane bus = $101000+ 103950+ 55000

The total life-cycle costs of using one propane bus is $ 259950

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