1. What data does Rebecca need to help perform the analysis for her dad?
2. What assumptions should she use in her calculations?
3. What technique should Rebecca use to solve this problem?
4. What might Rebecca's solution look like?
5. What recommendation should Rebecca make? How should it be presented to Jim?

Daddy Wants a Diesel or Does He? Kenneth D. Machande Woodrow D. Richardson University of Mary Washington University of Mary Washington INTRODUCTION The engine choices were a 3.6-liter V6 rated at 295 horsepower, a 3.0-liter diesel V6 rated at 240 horsepower, or a 5.7-liter V8 rated at Rebecca shook her head and gave a loud sigh as she hung up the 360 horsepower. All of the trucks were capable of pulling Jim's boat, phone from talking with her dad. a 17-foot Carolina Skiff that weighed just short of 1,500 lbs. including "What is it?" her roommate Claire asked. the boat, motor, and gear. "Per usual, Daddy Jim wants me to use my 'schooling,' as he Vehicle mileage was one issue at hand, as well as Jim's driving likes to call it, to help him decide whether to buy a new crew cab habits. The V6's Environmental Protection Agency (EPA) rating truck with either a diesel or a gas engine," Rebecca replied. was 17 city miles per gallon (MPG) and 25 highway MPG, while "Well, maybe he will forget all about it if you just wait him the diesel was rated 21 city MPG and 29 highway MPG. The V8 out," Claire offered. was rated at 15 city MPG and 22 highway MPG. The manufacturer "Oh no, you do not know him like I do. He will expect a full suggested 89 octane fuel for the V8, but Jim indicated he would analysis, or I will never hear the end of it!" use 87 octane unless engine pinging became pronounced. The "Well, maybe you will think twice before bragging to him about manufacturer's "Build and Price" feature indicated that the V6 your examination scores in accounting after this," Claire said. came standard, but the diesel was a $4,270 option, and a V8 was a "You got that right! I will have to get on it right after my last $1,250 option. final, or there will be no peace over break," Rebecca responded. GAS AND DIESEL PRICES THE MODELS AND ENGINES In his e-mail to Rebecca, Jim said diesel usually ran $0.25 more per Rebecca opened the last e-mail from her dad to find the following gallon than unleaded gas. He was not sure whether this was accurate information he compiled about the purchase decision. Jim made it but thought it was in the ballpark. Rebecca wondered about this, quite clear that he wanted a 4 x 4 to be able to get his boat up the since she had never paid attention to diesel prices in her own trips steep, sandy ramp he used most frequently. His friend, Kashef, to fill up. She decided to check the price differential by visiting the had a late-model truck that impressed Jim very much. Any truck U.S. Energy Information Administration website. See Table for the in this class that he chose would offer standard equipment, which information she found. is a huge step up from the 2012 Scion iO he had bought when gas Without computing the averages, she noticed there was a surged in 2012. However, Jim was not sure whether getting the premium for diesel compared with regular gasoline, as reported by standard engine (the V6), or paying extra for the V8 or Diesel made the U.S. Energy Information Administration averages.' Jim's estimate any sense. That is where Rebecca came in. of $0.25 appeared a bit high. She noted that she could obtain morespecific fuel price information based on geographic location. But there was also an issue of whether the area where Jim drives was inan arca requiring reformulated or conventional fuel. Because she lacked specific details and needed to get to a review session for intermediate class, Rebeeea decided o use the ULS. averages. DRIVING HABITS Rebecea did not need an e-mail to tell her about Jim's driving habits. He had recently commented that his current Scion iQ) had topped 100,000 miles after five and a half vears of ownership. He bought that car as a reaction to the spike in fuel prices in 2012 and regretred his decision ever since. Rebecca suspected that the miles he drove per year had declined some since she and her siblings had gone off to college more than three years ago, even though they usually refused to nde in his car, because, frankly, it was embarrassing. As Rebecca graduated and went off to college and with her siblings in the Peace Corps overseas, Jim would not have to drive them around anymore, thereby reducing his mileage. Rebecea also knew that Jim and her mother would take driving vacations as they became empty nesters. She decided that Jim would continue to drve approximately 18,000 miles per vear for the foreseeable future. Her best guess was that 60% of his driving was highway miles, while 40% were driven in the city. Jim had been very thrifry throughout his life. He was a very cautious investor, even more so now that he was getting older. During Rebeeca's last trip home, he had said that he thought he could continue to carn a return on all of his investments of 3.753% per year, which was in-line with the Wall Street Journal Prime Rate. Because of his thriftiness, Jim had accumulated enough wealth to pay cash for the purchase of the new car without affecting his or Rebecea's mom's lifestyles. CONCLUSION A car hom startled Rebecea out of her automotive ruminations. She motioned to her roommate that she will be out in a minute for their well-deserved, end-of-semester dinner. Rebecea knew she would need to put her thoughts into a more usable format before heading home over break. So diesel got better mileage, but it costs more per gallon and was a large additional cost at the time of purchase. This would require more than an armchair approach. Did she have all the information she needed to perform her analysis? What approach should she use to give her dad the best informanion to make a decision? QUESTIONS: 1. What data does Rebecea need to help perform the analysis for her dad? What assumptions should she use in her calculations? I~ What rechnique should Rebecea use o solve this problem? B What might Rebecea's solution look like? What recommendation should Rebecca make? How should w it be presented to Jim? Gasoline and Diesel Prices per Gallon, September 2016 to February 2017 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Average U.S. Gasoline Prices, All Grades 2377 2359 2295 2 366 2458 2416 Average U.S. Diesel {Highway) Prices, All Types 2.394 2454 2439 251 258 2564 Adapted from: \"Weekly Retail Gasoline and Diesel Prces,\" ULS. Enengy Information Administration, Released February 2, 2008, wwwoeia.govdren'pet/PET_PRI_GND_DCUS_WUS_ W him