Robert is looking to buy a deep fryer. He has narrowed his search down to two models. The following table gives the details of the prices, cost per use in electricity and oil, and lifespan of the two models Robert is considering to purchase. Brand Brand P Brand Q Price $144.00 $37.50 Avg. Cost/Use $0.49 $0.75 Lifespan 6 years 2 years Robert plans on using his deep fryer about eight times per month. After six years, which brand will have the lower lifetime cost, and by how much? Hint: Assume that either deep fryer can be repurchased at the same price, if needed to provide the desired length of service.
Answer
A
Brand P will be $118.26 cheaper than Brand Q.
B
Brand P will be $149.76 cheaper than Brand Q.
C
Brand Q will be $184.50 cheaper than Brand P.
D
Brand Q will be $31.50 cheaper than Brand P.
Explanation
In six years, Robert will use the fryer 8 × 12 × 6 = 576 times. Brand P costs $144 to buy and $0.49 × 576 = $282.24 to operate, for a total of $426.24. Brand Q needs three fryers to cover six years, costing 3 × $37.50 = $112.50, and its operating cost is $0.75 × 576 = $432, for a total of $544.50. Brand P is $544.50 − $426.24 = $118.26 cheaper, so choice A is correct.
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