Luke Grimes received a travel allowance from his employer for the full year of assessment. During the current year of assessment, he travelled 45 000km. 20 000kms were business kilometres. He kept an accurate logbook. His actual vehicle expenses for the year were R15 000. The full amount was allowed. His vehicle originally costs R220 000 including VAT The actual cost per kilometre is? Select one: O a. R1.03/km Ob. R3.59/km OcR4.89/km O d. R0.33/km

Luke Grimes received a travel allowance from his employer for the full year of assessment. During the current year of assessment, he travelled 45 000km. 20 000kms were business kilometres. He kept an accurate logbook. His actual vehicle expenses for the year were R15 000. The full amount was allowed. His vehicle originally costs R220 000 including VAT The actual cost per kilometre is? Select one: O a. R1.03/km Ob. R3.59/km OcR4.89/km O d. R0.33/km

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company is currently paying its employees $0.51 per mile to drive their own cars when on company business. However, it is considering supplying employees with cars, which would involve the following cost components: car purchase at $22,000 with an estimated three-year life; a net salvage value of $5,000; taxes and insurance at a cost of $1,000 per year; and operating and maintenance expenses of $0.25 per mile. If the interest rate is 10% and the company anticipates an employee's annual travel to be 30,000 miles, what is the equivalent cost per mile (without considering income tax)? Which plan is better?
Trucks used by a logistics company for their offered services have an annual cost of $20,000 for the next 8 years. Two separate payments of $100,000 are also made in year 12 and 18. If the expected life of the truck is 30 years, what is the equivalent uniform annual expense over 30 years if the annual interest is 6%?
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Mark Ewing has decided to enter contract with uber service provider in his area. The driver offers a car variety of mileage or distance to be travelled to him. All contracts were to be signed for three years. The first option has a monthly rent of P3,000, with a total mileage allowance of 36,000 kilometers (an average of 12,000 kilometers per year) and a cost of P35 per kilometer for any kilometers over 36,000. The following table summarizes each of the Uber Service Contract offered to him: 3-Year Contract Monthly Cost Mileage Allowance Cost Per Excess Kilometer Option A P3,000 30,000 P 35 Option B P3,500 45,000 P 25 Option C P4,000 54,000 P 15 Mark has estimated that, during the 3 years of the agreement, there is a 40% chance he will drive an average of 12,000 kilometers per year, a 30% chance he will drive an average of 15,000 miles per year, and a 30% chance that he will drive 18,000 miles per year. In evaluating the options, Mark would…
Mark Ewing has decided to enter contract with uber service provider in his area. The driver offers a car variety of mileage or distance to be travelled to him. All contracts were to be signed for three years. The first option has a monthly rent of P3,000, with a total mileage allowance of 36,000 kilometers (an average of 12,000 kilometers per year) and a cost of P35 per kilometer for any kilometers over 36,000. The following table summarizes each of the Uber Service Contract offered to him: 3-Year Contract Monthly Cost Mileage Allowance Cost Per Excess Kilometer Option A P3,000 30,000 P 35 Option B P3,500 45,000 P 25 Option C P4,000 54,000 P 15 Mark has estimated that, during the 3 years of the agreement, there is a 40% chance he will drive an average of 12,000 kilometers per year, a 30% chance he will drive an average of 15,000 miles per year, and a 30% chance that he will drive 18,000 miles per year. In evaluating the options, Mark would…
Mark Ewing has decided to enter contract with uber service provider in his area. The driver offers a car variety of mileage or distance to be travelled to him. All contracts were to be signed for three years. The first option has a monthly rent of P3,000, with a total mileage allowance of 36,000 kilometers (an average of 12,000 kilometers per year) and a cost of P35 per kilometer for any kilometers over 36,000. The following table summarizes each of the Uber Service Contract offered to him: 3-Year Contract Monthly Cost Mileage Allowance Cost Per Excess Kilometer Option A P3,000 30,000 P 35 Option B P3,500 45,000 P 25 Option C P4,000 54,000 P 15 What decision would Mark make if he wanted to minimize her expected cots (monetary value)? Calculate the expected value of perfect information for this problem.
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