Question

5. (10 points) As the price of gasoline goes up, people are willing to drive farther to fill their tank in order to save money. Assume you had been buying gasoline for $2.40 per gallon and that it went up to $2.83 per gallon at the station where you usually go. If you drive an F-150 pickup that gets 25 miles per gallon, what is the round-trip distance you can drive to break even if it will take 16 gallons to fill your tank? Use an interest rate of 8% per year. (20 points) 6. (15 points) A new structural design software package is available for analyzing and designing three-sided guyed towers and three- and four-sided self-supporting towers. A single-user license will cost $10,000 per year. A site license has a one- time cost of $25,000. A structural engineering consulting company is trying to decide between two alternatives: buy a single-user license now and one each year for the next 3 years (which will provide 4 years of service) or buy a site license now. Determine which strategy should be adopted at an interest rate of 10% per year for a 4-year planning period using the annual worth method of evaluation. (20 points)

Answer 1

0 lution-5 en dat at station u3 per gallon you d ioe a F150 pick up thae e mites pe gallen.he he totp distance You can datce to beeakeven denoce by mile, otu take ls gallons to r yoa tank 2.40 0.096 (x) mtg " 6.88 2 6.8&