Question: please explain thoroughly. thank you! 2. Identifying Relevant Costs. Darrell purchased a used automobile for $8,000 at the beginning of last year and incurred the
2. Identifying Relevant Costs. Darrell purchased a used automobile for $8,000 at the beginning of last year and incurred the following operating costs: Depreciation ($8,000 7 5 years) Insurance Garage rent Automobile tax and license Variable operating cost Cost of gasoline $1,600 $1,200 $360 $40 $0.14 per mile $0.10 per mile The variable operating cost consists of oil, tires, maintenance, and repairs. Darrell estimates that, at his current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $1,600. The car is kept in the garage for a monthly fee. a. Darrell is unsure about whether he should use his own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs are relevant in the decision? b. If the trip would be 600 miles round trip, and the cost of renting a car (fuel included) is $160, should he use his own car or rent a car
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