An aerodynamic three- wheeled auto-mobile runs on compressed natural gas stored
ID: 1173258 • Letter: A
Question
An aerodynamic three- wheeled auto-mobile runs on compressed natural gas stored in two cylinders in the rear of the vehicle. The $13,000 Dart can cruise at speeds up to 80 miles per hour, and it can travel 100 miles per gallon of fuel. Another two-seater automobile costs $10,000 and averages 50 miles per gallon of compressed natural gas. If fuel costs $8.00 per gallon and MARR is 10% per year, over what range of annual miles driven is the Dart more economical? Assume a useful life of five years for both cars.
Explanation / Answer
let the annual miles driven be x
then annual cost of fuel for dart = 8x/100
annual cost of fuel for two seater = 8x/50
total cost inccured for dart = 13000 + 8x[P/A,10,5]/100
total cost inccured for two seater = 10000 + 8x[P/A,10,5]/50
comparing above two
3000 < 8x[P/A,10,5]/50 - 8x[P/A,10,5]/100
3000< 8x[P/A,10,5]/50
98.92<x
x>93miles
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