How many miles must each salesperson drive each year

Assignment Help Microeconomics
Reference no: EM132160447

Question: A firm must decide whether to provide their salespeople with firm-owned cars or to pay a mileage allowance for their own cars. New cars would cost about $28,000 each and could be resold 4 years later for about $11,000 each. Annual operating costs would be $1200 per year plus 24c per mile. If the salespeople drove their own cars, the firm would pay 50c per mile. How many miles must each salesperson drive each year for it to be economically practical for the firm to provide the cars? Assume a 10% annual interest rate. Use an annual cash flow analysis.

Reference no: EM132160447

Questions Cloud

How you tend to eat most of the time : Do you feel that the three days are typical of how you tend to eat most of the time? If not, why not?
What is a blockchain : 1- What is a blockchain? 2- What does the block in the blockchain consist of?
Should al refinance the loan : When he purchased his home, Al Silva borrowed $280,000 at 10% interest to be repaid in 25 equal annual end-of-year payments. After making 10 payments.
Temperature conversions : Perform the calculation using the formula. Hint: include a loop that goes over the temperature values.
How many miles must each salesperson drive each year : A firm must decide whether to provide their salespeople with firm-owned cars or to pay a mileage allowance for their own cars. New cars would cost about $28,000
Solve problem using annual cash flow analysis : A manufacturer is considering replacing a production machine tool. The new machine, costing $37,000, would have a life of 4 years and no salvage value.
Greatest effect on real gdp when unemployment : Why will a sale of bonds have the greatest effect on real GDP when unemployment is low vs high?
What you think about the issue of environmental justice : Explain what you think about the issue of environmental justice and Bullard's ideas. Are his ideas and principles good or not? Which ones are best?
Determine whether the hydro-clean offer should be accepted : An oil refinery must now begin sending its waste liquids through a costly treatment process before discharging them into a nearby stream.

Reviews

Write a Review

Microeconomics Questions & Answers

  Determine what quantity of labor to demand

Explain how your chosen organization determines what quantity of labor to demand and what events could shift the demand and supply of that labor.

  How the industry structure have changed over time

This must include a size and growth rate terms of sales growth and profitability, market structure analysis in terms of selected industry's competitive.

  Considered the standard operating software worldwide for pc

Microsoft's Window 8 software product is considered the standard operating software worldwide for pc's. Thus, Microsoft can be thought as a type of: (a). Duopoly (b) monopoly (c) utility (d) free good.

  Identify some ways that society has tried to mitigate

Explain what the specific problem is for each resource and identify some ways that society has tried to mitigate the problems of that common resource.

  What will price and output be if there is no dominant firm

What will price and output be if there is no dominant firm Now assume that there is a dominant firm, whose marginal cost is constant at $6. Derive the residual demand curve that it faces and calculate its profit-maximizing output and price.

  Analyze the major short run and long cost functions

Determine the market structure in which the low-calorie frozen, microwavable food company operates - Analyze the major short run and long cost functions for the low-calorie, frozen microwaveable food company

  Describe expected environmental effect of increasing mpg

Serious criticism has been lodged against the CAFE standards because U.S. automakers res- ponded by using more plastics in automobiles (to make the cars lighter in weight) to meet the more restrictive CAFE standards.

  Determine the interest rate gene paid

Find the interest rate Gene Milton borrowed a sum of $5,000 from his uncle be. After three years, he paid back a sum of $5,000 and paid another $1000 in the following year to pay off the Ioan.

  Wat does this imply about countrys rate of saving vs

we have established a relationship between net capital outflow nco and the trade balance net exports. during this

  What happens to price and quantity of eggs-flour and cakes

Flour and eggs are complements in making a cake. Assume that cakes, flour, and eggs are bought and sold in price-takers' markets.

  Determine annual interest rate for a mutual fund return

Melinda Gibbs would like for her descendants to be able draw $40,000 every year for ever starting 30 years from now.

  What are the reasons for the pay differential

Based on information you find in the sites below, compile a list of the five most important statistics that you find regarding pay differentials. What are the reasons for the pay differential

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd