Capital Budgeting Project

 

Your company is considering purchasing a fleet of 10 vehicles for the sales staff. You have been tasked with obtaining information and performing the analysis. Currently, the company reimburses employees for the use of their personal vehicle at $.55 per mile. Each of the sales staff (10 of them) averages approximately 500 per week over the course of the year. The purpose of the vehicles is to support sales staff in the DFW area for at least five years. The cars should be a mid-level style. You should select one from three different auto manufacturers and select at least one EV.

Collect information on the price (use MSRP less 10% as the company is making a bulk purchase).

Collect information on the MPG/electric charge costs (use gas prices at $3.20 per gallon that will
increase 3% over the next 5 years) (Research EV charge costs at a charging station- adjust for a
3% increase over the next 5 years)

Make reasonable estimates on maintenance costs over the five-year period.

Insurance is set at $80 per month and will increase 3% over the next 5 years.

Assume your interest rate is 5.25% for purchase with an estimated salvage value of 30% of
original cost.

Consider how much the company will save/spend for the fleet over the course of one year, five
years.

Consider if the project has a positive NPV, IRR, Payback with any cost savings.

Discuss qualitative aspects of this decision.

 

Sample Solution

him, “It’s the only class I have worth taking” (Bechdel 199). The dynamic between Alison and Bruce in a classroom setting shows how literature reinforces a connection between the two. The relationship between Alison and Bruce grew because of their admiration of literature. She spends a lot of her time discussing novels with her father, sharing their ideas and views. Sadly, this is one of the few ways Alison and Bruce are able to communicate. Bruce gave her a copy of a novel, which includes lesbian themes. Alison was shocked that her father suggested she read this book, as she hadn’t come out to her father yet. By giving her this novel, there was a spark of connection between the two that allowed them to open up to each other to speaking about their sexuality. Additionally, Alison discovered she is a lesbian shortly before Bruce’s death. Her awakening was sparked by literature. Alison spent her days in the public library reading about homosexuality, going to meetings called “gay union” and dating girls. Also, one great example is found when Bechdel describes her father using with literature she read (64). At this point in the memoir, she is describing how her father is not unlike Gatsby from The Great Gatsby. She goes on to say that her father even looked like Robert Redford in his portrayal of Gatsby in the 1974 film. Based on this analysis, literature plays a significant role in shaping the personalities and sexual orientation of Alison and her father.

In conclusion, it is can be ascertained that Alison and her father Bruce had a strained relationship, however, they simultaneously face many of the same feelings as the two are both queer, interested in literature, and the desire to be the opposite sex. The contradiction among characters’ personalities adds to the thickening of the plot. From early on Alison wanted to push through with her masculinity however, her father oppressed it with his excessive feminine tactics. Her father wishes for her to always be well dressed and proper, but she plans to do the opposite. The discrepancy between Alison and Bruce is Bruce’s decision to keep

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