Question

Your office needs to deliver products to various sites in your town. You can hire a firm to make those deliveries for $200 per month plus mileage of 50 cents per mile based on an average of 1200 miles per month. Or you can lease a truck for $350 per month and pay the related expenses. You estimate that the related expenses for gas, insurance and other are $480 per month.Which would be the best deal, contracting or leasing? How much would you save in a year?

Answer 1

hire firm:
200+0.50*1200 each month
200+600=800

lease truck:
350+480 each month
=830

so with contracting a firm instead of leasing trucks you would save 30$ each month or 30*12=360$ each year