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Which vehicle is more economical using annual cash flow analysis? Vehicle A B Cost $45,000 $38,000...

Which vehicle is more economical using annual cash flow analysis?

Vehicle A B

Cost $45,000 $38,000

Usefule life 5 7

Fuel cost $1.25 $1.25 per gallon

mileage 20 12 per gallon

Repair/Yr. $2000 $1500

Insurance/Yr. $1200 $1100

Salvage Value $6,000 $7,000

Annual miles driven 20,000, with interest at 8%

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Answer #1

Hence , B is more economical.

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