A suburban taxi company is considering buying taxis with diesel engines instead of gasoline engines. The cars average 50,000 km a year, with a useful life of 3 years for the taxi with the gas engine and 4 years for the diesel taxi. Other comparative information is as follows:

Use an annual cash flow analysis to determine the more economical choice if interest is 6%.

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Diesel Gasoline $13.000 $12,000 Vehicle cost Fuel cost per liter 484 51 35 Mileage, in km/liter Annual repairs Annual insurance premium 28 300 200 500 500 End-of-useful-life resalee 2,000 3,000