A suburban taxi company is considering buying taxis with diesel engines instead of gasoline engines. The cars average 50,000 km a year, with a useful life of 3 years for the taxi with the gas engine and 4 years for the diesel taxi. Other comparative information is as follows: Use an annual cash flow analysis to determine the more economical choice if interest is 6%.

Transcribed Image Text:

Diesel Gasoline Vehicle cost $13,000 S12,000 48g 35 $ 300 S 200 Fuel cost per liter Mileage, in km/liter Annual repairs Annual insurance premium End-of-useful-life resale value 51¢ 28 50 500 3,000 2,000