Jacobson's Taxi Service operates a fleet of 60 taxis.They replace 25% of their fleet every year.This year the company president is considering changing over to hybrid vehicles.The model she has in mind costs $5,000 more than replacing the existing model,but will use 30% less fuel.The price of fuel is expected to remain constant for the upcoming year's budget.
The following table presents cost and distance information for the entire fleet:

Required:
1.Determine the fuel budget for the upcoming year for both the existing and hybrid models on a per vehicle basis.
2.Prepare a cost/benefit analysis for the hybrid vehicle purchase on a per vehicle basis.assuming fuel costs remain constant over the life of the vehicle.
3.Provide a qualitative factor that would be helpful in making the decision.

Question

Jacobson's Taxi Service operates a fleet of 60 taxis.They replace 25% of their fleet every year.This year the company president is considering changing over to hybrid vehicles.The model she has in mind costs $5,000 more than replacing the existing model,but will use 30% less fuel.The price of fuel is expected to remain constant for the upcoming year's budget.
The following table presents cost and distance information for the entire fleet:
  
Required:
1.Determine the fuel budget for the upcoming year for both the existing and hybrid models on a per vehicle basis.
2.Prepare a cost/benefit analysis for the hybrid vehicle purchase on a per vehicle basis.assuming fuel costs remain constant over the life of the vehicle.
3.Provide a qualitative factor that would be helpful in making the decision.

Quizplus · Accepted Answer

The Answer of Jacobson's Taxi Service operates a fleet of 60 taxis.They replace 25% of their fleet every year.This year the company president is considering changing over to hybrid vehicles.The model she has in mind costs $5,000 more than replacing the existing model,but will use 30% less fuel.The price of fuel is expected to remain constant for the upcoming year's budget.
The following table presents cost and distance information for the entire fleet:
  
Required:
1.Determine the fuel budget for the upcoming year for both the existing and hybrid models on a per vehicle basis.
2.Prepare a cost/benefit analysis for the hybrid vehicle purchase on a per vehicle basis.assuming fuel costs remain constant over the life of the vehicle.
3.Provide a qualitative factor that would be helpful in making the decision.

Jacobson's Taxi Service Operates a Fleet of 60 Taxis