A firm must decide whether to provide theirsalespeoplewith
Chapter , Problem 6-40(choose chapter or problem)
A firm must decide whether to provide theirsalespeoplewith firm-owned cars or to pay a mileageallowance for their own cars. New cars would costabout $28,000 each and could be resold 4 yearslater for about $11,000 each. Annual operating costswould be $1200 per year plus 24?c per mile. If thesalespeople drove their own cars, the firm would pay50?cper mile. How many miles must eachsalespersondrive each year for it to be economically practical forthe firm to provide the cars? Assume a 10% annualinterest rate. Use an annual cash flow analysis
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