Two automobile manufacturers designed a car that runs on gasoline stored in a tank near the engine,

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Two automobile manufacturers designed a car that runs on gasoline stored in a tank near the engine, which is located at the rear of the vehicle. Company A offers the car at $20,000 and it speeds up to 140 km per hour and can travel 18 km per liter of fuel. The car from company B costs $16,000 and averages 16 km per liter of gasoline. If the fuel costs $1.2 per liter and MARR is 10% per year, over what range of annual kilometres driven is company A's car more economical? Assume a useful life of 5 years for both cars.
MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...
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Engineering Economy

ISBN: 978-0132554909

15th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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