k t k A int 1 ences Kristen Lu purchased a used automobile for $31,250 at the beginning of last year and incurred the following operating costs: Depreciation ($31,250+ 5 years) Insurance $ 6,250 $3,200 $ 1,700 Garage rent Automobile tax and license $ 850 Variable operating cost $ 0.08 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $6,250. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 30,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) Average fixed cost per mile Variable operating cost per mile Average cost per mile

k t k A int 1 ences Kristen Lu purchased a used automobile for $31,250 at the beginning of last year and incurred the following operating costs: Depreciation ($31,250+ 5 years) Insurance $ 6,250 $3,200 $ 1,700 Garage rent Automobile tax and license $ 850 Variable operating cost $ 0.08 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $6,250. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 30,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) Average fixed cost per mile Variable operating cost per mile Average cost per mile

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 20P

See similar textbooks

Similar questions

Kristen Lu purchased a used automobile for $25,100 at the beginning of last year and incurred the following operating costs: Depreciation ($25,100 ÷ 5 years) $ 5,020 Insurance Garage rent Automobile tax and license Variable operating cost $ 2,600 $ 1,300 $ 680 $ 0.14 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $5,020. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 24,000 miles last year. Compute the average cost per mile of owning and operating the car. Note: Round your answers to 2 decimal places. Average fixed cost per mile $ 0.40 Variable operating cost per mile Average cost per mile $ 0.14 $ 0.54 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What…
es Kristen Lu purchased a used automobile for $33,900 at the beginning of last year and incurred the following operating costs: Depreciation ($33,900 ÷ 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $ 6,780 $ 3,500 $ 1,800 $ 920 $ 0.15 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $6,780. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 26,000 miles last year. Compute the average cost per mile of owning and operating the car. Note: Round your answers to 2 decimal places. Average fixed cost per mile Variable operating cost per mile Average cost per mile 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are…
Kristen Lu purchased a used automobile for $25,950 at the beginning of last year and incurred the following operating costs: Depreciation ($25,950+ 5 years) $ 5,190 $ 2,700 Insurance. $ 1,400 $ 710 $ 0.06 per mile Garage rent Automobile tax and license Variable operating cost The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage. the car will have zero resale value in five years, so the annual straight-line depreciation is $5,190. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 20,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Average fixed cost per mile Variable operating cost per mile Average cost per mile 25,400.00 $1,200.00 $ 26,600.00
Kristen Lu purchased a used automobile for $15,850 at the beginning of last year and incurred the following operating costs: Depreciation ($15,850 + 5 years) Insurance $ 3,170 $ 1,600 Garage rent Automobile tax and license Variable operating cost $ 800 $ 430 $ 0.09 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $3,170. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 15,000 miles last year. Compute the average cost per mile of owning and operating the car. Note: Round your answers to 2 decimal places. Average fixed cost per mile Variable operating cost per mile Average cost per mile 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are…
Kristen Lu purchased a used automobile for $11,450 at the beginning of last year and incurred the following operating costs: $ 2,290 $ 1,200 $ 600 $310 Depreciation ($11,450 ÷ 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $ 0.13 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $2,290. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 11,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) Average fixed cost per mile Variable operating cost per mile Average cost per mile 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are relevant in…
Kristen Lu purchased a used automobile for $13,200 at the beginning of last year and incurred the following operating costs: Depreciation ($13,200 - 5 years) $ 2,640 Insurance $ 1,400 Garage rent $ 700 Automobile tax and license $ 360 Variable operating cost $ 0.08 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight - line depreciation is $2,640. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 17,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.)
Kristen Lu purchased a used automobile for $8,350 at the beginning of last year and incurred the following operating costs: Depreciation ($8,350 ÷ 5 years) $ 1,670 Insurance $ 900 Garage rent $ 500 Automobile tax and license $ 230 Variable operating cost $ 0.11 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $1,670. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 11,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are relevant in this decision? (You may select more than one…
Kristen Lu purchased a used automobile for $26,800 at the beginning of last year and incurred the following operating costs: Depreciation ($26,800 ÷ 5 years) $ 5,360 Insurance $ 2,800 Garage rent $ 1,500 Automobile tax and license $ 740 Variable operating cost $ 0.13 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $5,360. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 26,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are relevant in this decision? Assume that…
Kristen Lu purchased a used automobile for $8,350 at the beginning of last year and incurred the following operating costs: Depreciation ($8,350 ÷ 5 years) $ 1,670 Insurance $ 900 Garage rent $ 500 Automobile tax and license $ 230 Variable operating cost $ 0.11 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $1,670. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 11,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.)
Kristen Lu purchased a used automobile for $7,950 at the beginning of last year and incurred the following operating costs: Depreciation ($7,950 ÷ 5 years) $ 1,590 Insurance $ 800 Garage rent $ 400 Automobile tax and license $ 210 Variable operating cost $ 0.12 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $1,590. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 10,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are relevant in this decision? (You may select more than one…
Kristen Lu purchased a used automobile for $15,000 at the beginning of last year and incurred the following operating costs: Depreciation ($15,000 ÷ 5 years) $ 3,000 Insurance $ 1,500 Garage rent $ 800 Automobile tax and license $ 400 Variable operating cost $ 0.10 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $3,000. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 19,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are relevant in this decision? Assume that…
(b) Chichi is unsure whether she should use her own car or rent a car to go on an extended cross-country trip for two (2) weeks during the mid-term break. Explain and identify which of the above costs are relevant and which are irrelevant in her decision.