What is the crossover point in miles between the hybrid vehicle and the alternat

Question

What is the crossover point in miles between the hybrid vehicle and the alternative vehicle from a competing auto manufacturer? Hybrid Vehicle Vehicle Purchase Cost Vehicle Operating Cost per Mie Useful Life of Vehicle Miles per Year Miles per Gallon Average Fuel Price per Gallon Alternative Vehicle $19,500 - $0.08 5 years 4,000 35 $3.77 $18,000Vehicle Purchase Cost $0.13 Vehicle Operating Cost per Mie Useful Lile of Vehicle Mies per Year Mies per Galon Average Fuel Price per Gallon 15 years 14,000 31 $3.77 The crossover point, M, s miles (round your response to the nearest whole number)

Explanation / Answer

Total variable cost per mile of Hybrid Vehicle = 0.13 + 3.77/31 = 0.252

Total variable cost per mile of Alternative Vehicle = 0.08 + 3.77/35 = 0.188

Crossover point, M = (Purchasing cost of Alternative Vehicle - Purchasing cost of Hybrid Vehicle) / (Variable cost per mile of Hybrid Vehicle - Variable cost per mile of Alternative Vehicle)

= (19500 - 18000) / (0.252 - 0.188)

= 23,438 miles

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