Harmon Auto Supply delivers parts to area auto service centres and is replacing its fleet of delivery vehicles. What is the total vehicle life cycle cost of this gasoline engine truck given the information provided in the following table?
Vehicle Purchase Cost $25 000
Vehicle Operating Cost Per Kilometre $0.13
Useful Life of Vehicle 10 years
Kilometres Per Year 18 000
Kilometres Per Litre 25
Average Fuel Price Per Litre $2.65

Question

Harmon Auto Supply delivers parts to area auto service centres and is replacing its fleet of delivery vehicles. What is the total vehicle life cycle cost of this gasoline engine truck given the information provided in the following table? 
Vehicle Purchase Cost $25 000
Vehicle Operating Cost Per Kilometre $0.13
Useful Life of Vehicle 10 years
Kilometres Per Year 18 000
Kilometres Per Litre 25
Average Fuel Price Per Litre $2.65

Quizplus · Accepted Answer

The total vehicle life cycle cost is the sum of the vehicle purchase cost, the vehicle operating cost per kilometre, and the fuel cost per kilometre. The fuel cost per kilometre is calculated by dividing the average fuel price per litre by the kilometres per litre. The vehicle operating cost per kilometre is given in the table. The total vehicle life cycle cost is:$25,000 + (10 years * 18,000 kilometres/year * $0.13/kilometre) + (10 years * 18,000 kilometres/year / 25 kilometres/litre * $2.65/litre) = $67,480

Harmon Auto Supply Delivers Parts to Area Auto Service Centres