Question

met prepared home meal 2. (50 points) Healthy Chef Creation (HCC) is a local provider of fresh gourmet, prepared the delivery services in Philadelphia area. HCC is in the process of purchasing two minivan food delivery purposes. The company has found two minivans that will meet their needs Dodge Grand Caravan for 525.000, and Toyota HYB for $1.00 T relevant information about these two vans are reported in the following tables Dodge Grand Caravan Toyota HYBS Vehicle purchase cost $25.000 Vehicle purchase cost Vehicle operating cost per year $0.20 Vehicle operating cost per year Useful Afe of vehicle (years) 15 Useful wife of vehicle (years) Miles per year 25,000 Miles per year Miles per gallon (MPG) 20 Miles per gallon (MPG) Average fuel price per gallon $2.65 Average fuel price per gallon $30,000 50.22 25.000 $2.65 a. What is the total life cycle cost for each vehicle? Compute What is the break-even point in miles between Dodge Grand Caravan and Toyota HY S7 Comp e. Given the break-even mileage in part b, what is the payback period in years? Compute. d. Starting from part a, what happens to total life cycle cost for each vehicle if gasoline prices rise from 52.65 to 3.65 per gallon and the price of Toyota HYB 5 rises from $30,000 to $35,000? Which car will the more economical now? Show your work. (Show all your answers in detail)

Answer 1

@ Total Ufe cycle cost for Dodge Grand Canan purchase cost $ 25,000 time operating cost = $ 0:2x15 $ 25,0c0 X5x265 20 Total $ 74,690-5 cost ferno Toyota H48 5 $30.000 $ 0-22 x 15 $ 25.000 X 15 x 2-65 35 $ 58,396. 16 Let I-be break-even point in miles for Dodge Grand Canvas > 25,000 + 3+ I) 5 X2-65 = 30.000+ 3.3+ ** 20 I X5X2-65 - DX5X2-65 - 5.CCO +0.3 20 30 → = 60 x(5006:3 7547.62% miles Ex 2-65 Baleak-even point = 113,214.34 Miles

113214·34 25,000 years = pay back period payback period = 4 • 53 years. (d) If Price Gasoline price rises from $2.65 to $3.65 per of toyota Ases from $30,000 to $35,000 gallon. Total life cycle cost Dodge Grand purchasing cost $ 25,000 operating cost_ $ 0-2x15 fuel cost $ 25,000x 15 x 3-65 Toyota $ 35,000 $ 0.22 X 15 $ 25000X IS x 3.65 BO B5 = 39, 107-14 20 -68,437.5 Total $ 93,440-5 1. $ 74, 110.44 life cycle cost Still .. Toyoto HYB 5 is more economical