. Big Country Tours is expanding its business and purchasing a hybrid tour bus. The cost of the bus is $92799.00 plus 5% GST. The company takes out a loan to cover the cost and will pay $1358.00 biweekly (once every two weeks) for a 3-year term. The insurance for the new bus will be $448.90 monthly and the average weekly gas cost will be $686.00. Maintenance for the bus will be approximately $1690.00 every six months. What will be the cost to own and operate this bus every month? Hint: Calculate cost for 1 yr then divide by 12
First, let's calculate the total cost of the bus with GST included:
Cost of the bus: $92,799.00
GST (5%): $92,799.00 x 0.05 = $4,639.95
Total cost of the bus: $92,799.00 + $4,639.95 = $97,438.95
Next, let's calculate the total cost of the loan over 3 years:
Biweekly payment: $1,358.00 x 26 payments per year = $35,308.00 per year
Total cost of the loan over 3 years: $35,308.00 x 3 = $105,924.00
Now, let's calculate the monthly insurance cost:
Insurance cost: $448.90 x 12 = $5,386.80 per year
Monthly insurance cost: $5,386.80 / 12 = $448.90 per month
Next, let's calculate the weekly gas cost and convert it to monthly:
Gas cost per week: $686.00
Gas cost per month: $686.00 x 4.33 (average weeks in a month) = $2,968.38
Now, let's calculate the maintenance cost per month:
Maintenance cost per year: ($1,690.00 x 2) $3,380.00
Monthly maintenance cost: $3,380.00 / 12 = $281.67
Now, let's calculate the total monthly cost to own and operate the bus:
Total monthly cost = ($97,438.95 + $105,924.00 + $448.90 + $2,968.38 + $281.67)
Total monthly cost = $206,061.90
Therefore, the cost to own and operate this bus every month will be approximately $17,171.83.