Question: 6) Solve problem 5.4 55.4 A small commercial company is about to buy cars for the sales people. After an extensive market research the company

6) Solve problem 5.4 55.4 A small commercial company is about to buy cars for the sales people. After an extensive market research the company is about to decide which one of the following two alternatives to choose based on the information provided in the following table. CHARACTERISTICS CAR 1 CAR 2 Purchase cost (9) 21,000 23,000 Operating cost ( per mile) 0,14 0,10 Average fuelefficiency (miles per gallon) 36 Average fuel price 4.1 C per gallon Annual distance 16000 miles Usefullife of car 4 years Compare the two car alternatives and estimate: a) the total life cycle cost of each alternative b) the crossover point in miles, and c) the crossover point in years 33

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