suppose you want to buy a new car and trying to choose between two models: model a: costs $17,000 and its gas mileage is 20 miles per gallon and its insurance is $200 per year. model b: costs $25,000 and its gas mileage is 35 miles per gallon and its insurance is $400 per year. find the number of years in which the total cost to keep the two cars will be the same. identify the number of months where neither car holds a cost of ownership advantage. what effect would the cost of gas doubling have on cost of ownership? show hand calculations. if you can sell neither car for 40% of its value at any time, how does the analysis change? show hand calculations.
model a:
costs $17,000
gas mileage is 20 miles per gallon
$200 a year insurance
total cost=per year let x miles x=40,000 gallon=x/20
c=17,000 + (40,000/20) * 3+200 17,000 + 2,000 * 3 + 200 17,000 + 6,000 + 200 =$23,200
model b: 2)
cost $25,000
gas mileage is 35 per gallon
$400 a year insurance
gallon = 40,000 / 35 = 1143 (approx.) c=25,000 + 1,143 * 3 + 400 =$28,829