QUESTION 20

Problem C: Use the following to answer questions 20- 22:

Carson City is buying new buses, and has to select from two models. Model A (diesel bus) costs $80,000 to buy, with a fuel efficiency of 12 miles/gallon. Its operating cost is $0.28/mile. Model B (a hybrid bus) costs $105,000 to purchase, but gets an average of 35 miles/gal. Its operating cost is $0.32/mile. The annual distance traveled is 25,000 miles, and the expected service life of either bus is 10 years. The average diesel price is $4.50/gallon.

20. The total life cycle cost for Bus A (in $) is:

		a. 237,500
		b. 243,750
		c. 231,250
		d. 238,750
		e. 212,500

QUESTION 21

The total life cycle cost for Bus B (in $) is:

		a. 202,857
		b. 224,773
		c. 219,091
		d. 229,432
		e. 217,143

5 points

QUESTION 22

How many miles does each bus have to travel for the life cycle costs to be equal:

		a. 233,051
		b. 180,412
		c. 165,563
		d. 121,107
		e. 139,949