A firm is interested in developing a Decision Table to help sales managers manage their employee transportation expenses. Such a decision table will be used by a manager to determine whether an employee should be provided a new leased car, a new purchased car or pay the employee for miles logged when the employee uses his car for company business purposes. The car considered for acquisition is well equipped 2019 Nissan Infinity. The car is expected to be replaced once in three years. Following three competing alternatives are being considered.

Employee Reimbursement: Employee could use his/her own car and submit a monthly report indicating the mileage used for business. The firm will reimburse at $0.85 per mile. Purchase Alternative: Purchase price of the car is $35,000 inclusive of sales tax, title fees, etc. The expected resale value of the car is $18,000 at the end of 3 years. The resale value will go down by $0.15 for every mile driven in excess of 36,000 miles, and it will not go up if the miles driven is less than 36,000 miles.

Lease Alternative: Initial down payment including bank fee is $4,000. Lease term = 36 months. Monthly lease payment (payable beginning of the month) is $400. The lease allows for 36,000 miles over the lease term. Payment at lease termination is $2,000 to prepare the vehicle for sale to a different customer; the payment is due at the end of 36th month. Charge for excess mileage is 50 cents per mile inclusive of taxes. The excess mileage charges are due to the dealership at the end of the lease term (end of 36th month). The lease contract does not allow you to buy the vehicle at the end of lease termination.

Other Key Assumptions: EPA Estimate for fuel efficiency of the car considered = 25mpg combined. Average cost of Gasoline $4.00/gallon. Car wash & other miscellaneous maintenance charges ignore. You need to compute Present Value Cost of using the vehicle over a 3-year period for the above three mutually exclusive alternatives. Interest Rate is 12 percent per year compounded monthly.