(a) Q1: Examine the data in the Table below and determine the lifetimecosts of this hybrid vehicle. b) As logistics manager, you’re considering the following alternativevehicle for your fleet. What are its lifetime costs in comparison withthe hybrid vehicle?c) Calculate the indifference point between the two vehicle designsand the expected age of the vehicles at this point.d) Which car should you choose if you intend to own it for longer thanthis time? Q1a) Q1: Examine the data in the Table below and determine the lifetimecosts of this hybrid vehicle.Vehicle purchase cost17,000 euroVehicle operating cost per mile 0.12 euroUseful life of vehicle15miles per year14,000miles per gallon32Average fuel price per gallon3.75b) As logistics manager, you're considering the following alternativevehicle for your fleet. What are its lifetime costs in comparison withthe hybrid vehicle?19,000 euroVehicle purchase costVehicle operating cost per mile 0.09 euroUseful life of vehicle15miles per year14,00035miles per gallon3.75Average fuel price per gallonc) Calculate the indifference point between the two vehicle designsand the expected age of the vehicles at this point.d) Which car should you choose if you intend to own it for longer thanthis time?

To determine the lifetime costs of this hybrid vehicle, we need to consider both the purchase cost…

Answered: (a) Q1: Examine the data in the Table…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(a) Q1: Examine the data in the Table below and determine the lifetime
costs of this hybrid vehicle.

b) As logistics manager, you’re considering the following alternative
vehicle for your fleet. What are its lifetime costs in comparison with
the hybrid vehicle?

c) Calculate the indifference point between the two vehicle designs
and the expected age of the vehicles at this point.

d) Which car should you choose if you intend to own it for longer than
this time?

Q1
a) Q1: Examine the data in the Table below and determine the lifetime
costs of this hybrid vehicle.
Vehicle purchase cost
17,000 euro
Vehicle operating cost per mile 0.12 euro
Useful life of vehicle
15
miles per year
14,000
miles per gallon
32
Average fuel price per gallon
3.75
b) As logistics manager, you're considering the following alternative
vehicle for your fleet. What are its lifetime costs in comparison with
the hybrid vehicle?
19,000 euro
Vehicle purchase cost
Vehicle operating cost per mile 0.09 euro
Useful life of vehicle
15
miles per year
14,000
35
miles per gallon
3.75
Average fuel price per gallon
c) Calculate the indifference point between the two vehicle designs
and the expected age of the vehicles at this point.
d) Which car should you choose if you intend to own it for longer than
this time?

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