Which method of computation gives larger reimbursement

Assignment Help Microeconomics

Reference no: EM132154383

Question: Willie Lohmann travels from city to city in the conduct of his business. Every other year he buys a used car for about $15,000. The dealer allows about $8000 as a trade-in allowance, with the result that the salesman spends $7000 every other year for a car. Willie keeps accurate records, which show that all other expenses on his car amount to 32.3c per mile for each mile he drives. Willie's employer has two plans by which salesmen are reimbursed for their car expenses:

A. Willie will receive all his operating expenses, and in addition will receive $3500 each year for the decline in value of the automobile.

B. Willie will receive 52c per mile but no operating expenses and no depreciation allowance. If Willie travels 18,000 miles per year, which method of computation gives him the larger reimbursement? At what annual mileage do the two methods give the same reimbursement?

Reference no: EM132154383

Questions Cloud

Fiduciary duty and adverse treatment of the raiders : The Raiders claimed that NFL management’s wrongful control of the NFL entities resulted in a breach of fiduciary duty and adverse treatment of the Raiders.

At what speed should you make a trip : Your car gets 24 miles per gallon (mpg) at 60 miles per hour (mph) and 20 mpg at 70 mph. At what speed should you make a 500-mile trip.

Carry out a wilcoxon rank-sum test to determine : Carry out a Wilcoxon rank-sum test to determine if there is sufficient evidence at the 2.5% significance level to support the hypothesis that

Discuss the role of social media in e-commerce : Discuss the role of social media in e-commerce.

Which method of computation gives larger reimbursement : Willie will receive 52c per mile but no operating expenses and no depreciation allowance. If Willie travels 18,000 miles per year, which method of computation.

What the values of p are for which it is finite : For each, make sure to clearly state what the values of p are for which it is finite.

Confidence level and a sample size of 9 : Find the critical values X 2/L and X 2/R that correspond to a 95% confidence level and a sample size of 9.

Legal and Ethical Issues in IT : Legal and Ethical Issues in IT. What I'am looking for here is critical analysis, engagement and creativity.

Distribution match the expected distribution : If a student found the following counts in a package of 200 Sour Patch Kids, did the distribution match the expected distribution?

User Account

All Pages