A saleman has to decide whether to buy a regular gasolene vehicle or a hybrid one. He knows that the number of miles driven per year is one of the key determining factors. Given the information below on the two vehicles he is considering, calculate the breakeven number miles per year at a MARR of 8% per year.
Gas Vehicle
Hybrid Vehicle
Purchace Price
$24,000
$30,000
Service life
7 years
7 years
Market value at end service
$4,100
$5,100
Operating cost per mile
$0.22
$0.12
The breakeven number of miles per year is
? ?. 10,404
B. 13,525
OC. 12,485
D. 7,803