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Tom Miller purchased a new 4-door sedan for $34,590 two years

ago. He drove 22,322 miles during last year and kept a record of

all his expenses. He estimates the vehicle’s present value at

$20,190. Calculate Tom’s depreciation, total variable and fixed

costs, and his cost per mile to operate his vehicle last year

Respuesta :

It should be noted that the value of the depreciation is $7200 and the cost per mile will then be $0.48 per mile.

Calculation of depreciation.

It should be noted that the calculation for the depreciation will be:

= (Purchase price - Today's value) / Number of years owned

= ($34590 - $20190) / 2

= $14400 / 2

= $7200

The total variable cost will be:

= Gasoline + Oil changes + Maintenance + Cleaning

= $1848.30 + $51.85 + $126.84 + $242.90

= $2269.89

The total fixed cost will be:

= Insurance + License + Loan + Depreciation

= $785.00 + $125 + $395.30 + $7200

= $8505.30

The cost per mile will be:

= (Annual variable cost + Annual fixed cost) / Number of miles

= (2269.89 + 8505.30) / 22322

= 10775.19 / 22322

= $0.48 per mile.

Learn more about depreciation on:

brainly.com/6167460

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