Answer:
a) 7702.88 miles
b) If we drive more than 7702.88 miles per year, the dart would be more economical.
Step-by-step explanation:
Assuming a useful life of 7 years.
Let's calculate EUAC dart:
(15000)(A/P, 10%, 7) + (X/100mpg)(8)
= 15000 * 0.2054 + 0.08
= 3081.15 + 0.08X
EUAC For other automobile:
(12000)(A/P, 10%, 7) + (X/50mpg)(8)
= 12000 * 0.2054 + 0.16X
= 2464.92 + 0.16X
a) To solve for X, we have:
EUAC dart = EUAC other automobile
3081.15 + 0.08X = 2464.92 + 0.16X
0.08X - 0.16X = 2464.92 - 3081.15
-0.08X = - 616.23
X = 7702.88 miles
b) The range of annual miles driven is the Dart more economical.
EUAC dart < EUAC other automobile
3081.15 + 0.08X < 2464.92 + 0.16X
X > 7702.88 miles
If we drive more than 7702.88 miles per year, the dart would be more economical.
