Team 1: Truck Purchase Gas vs. Diesel David Beach – Fuel Research Chris Kaya – Estimated...
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Transcript of Team 1: Truck Purchase Gas vs. Diesel David Beach – Fuel Research Chris Kaya – Estimated...
Team 1: Truck PurchaseGas vs. Diesel
David Beach – Fuel Research
Chris Kaya – Estimated Maintenance Research
Toan Le – Vehicle Licensing Fee Research
Thomas Majich – Economic research & cost analysis
Reuben Quist – Annual Insurance Cost Research
Ford F-350 Reg. Cab 4x2 8’
Gas Engine 6.8L V10 EFI
Diesel Engine 6.0L Power
Stroke Turbo Diesel V8
vs.
Units of Comparison
Gas Mileage & differences in fuel cost
Insurance Cost per year Salvage Value (in 5 years) Annual Estimated Maintenance Annual Vehicle Licensing Fee
Assumptions
1. Rate of Inflation = 3.27% per year
10 year Treasury = 4.22%
6 month Treasury = 0.95%
2. Annual Miles Driven = 35,000 mi.
15,000 Highway
20,000 Street
Methodology
Gather relevant cost information for year 1. Using assumed rate of inflation, forecast annual costs over the next five years. Calculate net present worth of all cash outflow and inflows. The engine (gas vs. diesel) that has the greatest net present worth will be chosen.
Resources
Gas Mileage: Visit Dealership
Insurance Cost: contact insurance provider
Estimated Annual Maintenance: visit dealership, research consumer information
Fuel Costs: Average Southern California prices
Vehicle Licensing Fee: based on DMV calculation
Salvage Value: estimate percentage based on previous years