Assume that gasoline costs 360 per gallon and you plan to

Assignment Help Accounting Basics

Reference no: EM13609811

Anonymous answer rating percentage100%Answers Rated % Hybrid cars are touted as a "green" alternative; however, the financial aspects of hybrid ownership are not as clear. Consider the 2006 Honda Accord Hybrid, which had a list price of $5,450 (including tax consequences) more than a Honda Accord EX sedan. Additionally, the annual ownership costs (other than fuel) for the hybrid were expected to be $400 more than the traditional sedan. The EPA mileage estimate was 25 mpg for the hybrid and 23 mpg for the EX sedan.

a. Assume that gasoline costs $3.60 per gallon and you plan to keep either car for six years. How many miles per year would you need to drive to make the decision to buy the hybrid worthwhile, ignoring the time value of money?

b. If you drive 15,000 miles per year and keep either car for six years, what price per gallon would make the decision to buy the hybrid worthwhile, ignoring the time value of money?

c. Rework parts (a) and (b) assuming the appropriate interest rate is 10 percent and all cash flows occur at the end of the year.

d. What assumption did the analysis in the previous parts make about the resale value of each car?

Reference no: EM13609811

Questions Cloud

Jimmy co is considering a 12-year project that is estimated : jimmy co. is considering a 12-year project that is estimated to cost 900000 and has no residual value. jimmy co. seeks

Determine the heat loss per unit mass from the water wkg : the l1m long vertical copper tube of inner diameter di20mm and wall thickness t2mm contains liquid water at twater0

Project a requires an original investment of 65000 the : project a requires an original investment of 65000. the project will yield cash flows of 15000 per year for seven

A 75 microc charge is placed 46 cm from an identical 75 : a 75 microc charge is placed 46 cm from an identical 75 microc charge. how much work would be required to move a 0.72

Assume that gasoline costs 360 per gallon and you plan to : anonymous answer rating percentage100answers rated hybrid cars are touted as a green alternative however the financial

A project has estimated annual cash flows of 90000 for : a project has estimated annual cash flows of 90000 for three years and is estimated to cost 250000. assume a minimum

A 2 in diameter straight round shaft is subjected to a : a 2 in diameter straight round shaft is subjected to a bending of 2000 ft.lb a what is the nominal bending stress at

A copper bar 25 m long has a circular cross section of : a copper bar 2.5 m long has a circular cross section of radius 2 cm. one end is kept at 80 oc and the other end is kept

The gate opens when water levels reaches h2m on the left : water gate is hinged at point o. angle between the gate and the ground is given alpha 60 degrees. the gate opens when

User Account

All Pages