Your small remodeling business has two work vehicles. One is a small passenger car used for job site visits and for other general business purposes. The other is a heavy truck used to haul equipment. The car gets 25 miles per gallon (mpg). The truck gets 10 mpg. You want to improve gas mileage to save money, and you have enough money to upgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgraded car will get 40 mpg; an upgraded truck will get 12.5 mpg. The cost of gasoline is $2.65 per gallon. Calculate the annual fuel savings in gallons for the truck and car assuming both vehicles are driven 12,000 miles per year. (Do not round intermediate calculations.)

Explanation:

First - if we upgrade the Car :

Current cost of fuel in car - 12000/25*2.65 = 1272$

after upgrading the car , cost of fuel in car - 12000/40*2.65 = 795$

Net saving in fuel cost -   1272-795 = 477$

Second - if we upgrade the Truck :

Current cost of fuel in truck - 12000/10*2.65 = 3180$

after upgrading the truck , cost of fuel in truck - 12000/12.5*2.65 = 2544$

Net saving in fuel cost - 3180-2544 = 636 $

So, we should upgrade the truck, because it will give more saving in fuel cost.

ANNUAL FUEL SAVINGS IN GALLONS:

CAR - 477/2.65 = 180 GALLONS

TRUCK - 636/2.65 = 240 GALLONS

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