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Cost formula & expected cost

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QUESTION 4. Costs and the other related data to a car which was owned by Medex Corporation is as
follows:
Acquisition cost of the car : $80.000
Total mileage driven İn 2002 : 10.000 miles
Total mileage driven in 2003 : 20.000 miles
Year Gasoline Insurance Maintenance Lubricant Tax
2002 800 340 300 100 60
2003 1600 340 500 200 60
The expected total mileage is 400.000 during the useful life of the car. Depreciation expense will
be applied considering the mileage of the car driven each year. Assume that the cal' has no salvage
value at the end of its useful life.
a) Derive the cost formula for the car.
b) What would be the expected cost of the cal' when 15.000 miles are driven in 2004 ?

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The answer contains the computation of cost formula and expected cost of the car.

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