Cost of the two methods providing transportation

Assignment Help Financial Management

Reference no: EM131458051

A company is currently paying a sales representative $0.25 per mile to drive her car for company business. The company is considering supplying the representative with a car, which would involve the following: a car costs $12,000, has a service life of 5 years, and a market value of $3, 500 at the end of that time. Monthly storage costs for the car are $80, and the cost of fuel, tires, and maintenance is 15 cents per mile. The car will be depreciated by MACRS, using a recovery period of 5 years (20%, 32%, 19.20%, 11.52%, and 11.52%). The firm's marginal tax rate is 40%. What annual mileage must a salesman travel by car for the cost of the two methods providing transportation be equal if the interest rate is 15%?

Reference no: EM131458051

Questions Cloud

Identify various physical impairments typically suffered : Identify various physical impairments typically suffered by elderly people due to aging, illness, or disability. Explain why this topic is important to you.

Prove put-call parity for european options : Prove put-call parity for European options in the case of a single known dividend.

Determine if the company should invest in this project : A project requires an initial investment of $50,000. Using Future Worth analysis, determine if the company should invest in this project if the MARR is 15%

What is the price of the bond and yield to maturity : what is the price of the bond? Assume the bond is selling at $63. Whats the yield to maturity? does a change in interest rate have any effect on the bond price

Cost of the two methods providing transportation : What annual mileage must a salesman travel by car for the cost of the two methods providing transportation be equal if the interest rate is 15%?

Review the case of leland o brien rubinstein associates inc : Leland O'Brien Rubinstein Associates Inc.: Portfolio Insurance (Harvard Business School Case 294061-PDF-ENG). The case studies the rise and fall of Leland.

Discuss the transporters role : In 250 words or more. Discuss the transporters role, the port's role and the government's role in controlling invasive species and other hazards inherent.

What is the central argument : What is the central argument? What are its strengths and weaknesses? How does it fit in with or challenge issues we've discussed in class and throughout .

Elements in terms of an industry culture : Language would focus on these elements in terms of an industry culture. For example, is there a special vocabulary or terminology used for the profession?

User Account

All Pages