Cash for clunkers, Cash for Clunkers. A clunker that

Cash for clunkers

Assignment Help Financial Management

Reference no: EM131986734

Cash for Clunkers:

A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year. A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.

The government claims 700,000 vehicles were exchanged so that's 224 million gallons saved per year.

That equates to a bit over 5 million barrels of oil.

To put this perspective, 5 million barrels is about 5 hours worth of US consumption.

More importantly, 5 million barrels of oil at $95 per barrel costs about $475 million dollars.

The government PAID $3 BILLION to save $475 million.

What is the ROI ? s

Do you think it was worth it?

Reference no: EM131986734

Questions Cloud

Describe the economic circumstances of the time : Why do you think that the collapse of Storm occurred in late 2008? Describe the economic circumstances of the time and their coincidence with Storm’s collapse.

Hired as consultant to help determine their cost of capital : The firm will not be issuing any new stock. You were hired as a consultant to help determine their cost of capital.

They have to save each year to reach their new goal : how much would they have to save each year to reach their new goal?

Determine the equivalent uniform annual worth : Determine the equivalent uniform annual worth (EUAW) of the equipment at 8% interest. Express your answer in $ to the nearest $10.

Cash for clunkers : Cash for Clunkers. A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year. What is the ROI?

Compute realized rate of return for investor : Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called.

How company uses tvm in the business environment : Give specific examples of how a company uses TVM in the business environment.

What final payment will the bank require : what final payment will the bank require you to make so that it is indifferent to the two forms of? payment?

What is the remaining balance that must be paid off : After 5 years, the firm wants to pay off the loan. What is the remaining balance that must be paid off?

User Account

All Pages