To compare: The reimbursement amount from two different plans.

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Chapter 1, Problem 58P

To determine

To compare: The reimbursement amount from two different plans.

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Willie Lohmann travels from city to city for busi- ness. Every other year he buys a used car for about $15,000. The dealer allows about $8000 as a trade-in allowance, so Willie spends $7000 every other year for a car. Willie keeps accurate records of his expenses, which total 32.3¢ per mile. Willie's employer has two plans to reimburse car expenses: A. Actual expenses: Willie will receive all his oper- ating expenses, and $3500 each year for the car's decline in value. B. Standard mileage rate: Willie will receive 56.5¢ per mile but no operating expenses and no depre- ciation allowance. If Willie travels 18,000 miles per year, which method gives him the larger reimbursement? At what annual mileage do the two methods give the same reimbursement?

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Sorry, I forgot to add the info for MPC.