What is the cost of gasoline

Assignment Help Financial Management

Reference no: EM13727149

A large automobile manufacturer has developed a continuous variable transmission (CVT) that provides smooth shifting and enhances fuel efficiency by 3 mpg of gasoline. The extra cost of a CVT is $850 on the sticker price of a new car. For a particular model averaging 25 miles per gallon with the CVT, what is the cost of gasoline (dollars per gallon) that makes this option affordable when the buyer's interest rate is 9% per year? The car will be driven 110,000 miles uniformly over an eight-year period.

Reference no: EM13727149

Questions Cloud

How much do you need to have in your account at retirement : You want to receive 5,000 per month in retirement. If you can earn 0.75% per month and you expect to need the income for 25 years, how much do you need to have in your account at retirement? You want to receive $5,000 per month for the next 5 years. ..

What is the cost to create the tracking portfolio today : Consider a forward contract to buy 100 shares of UBS one year from today for $20.37 per share. UBS does not plan to pay dividend for the next year. The following list the closing price and interest rate information in the market today. Today’s closin..

Period if the interest had compounded annually : Travis invested $9,250 in an account that pays 6 percent simple interest. How much more could he have earned over a 7-year period if the interest had compounded annually?

Should they still comply with record keeping standards : If a company isn't public - or better said is a small, private company - should they still comply with record keeping standards? Why?

What is the cost of gasoline : A large automobile manufacturer has developed a continuous variable transmission (CVT) that provides smooth shifting and enhances fuel efficiency by 3 mpg of gasoline. The extra cost of a CVT is $850 on the sticker price of a new car. For a particula..

What percent change was this from the re-evaluation rate : The Turkish Lira (TL) was officially devalued by the Turkish government in February 2001 during a severe political and economic crisis. The Turkish government announced on February 21 that the lira would be devalued by 20%. The spot exchange rate on ..

How their good/service contributed to economic progress : Provide a summary of the entrepreneur and their successes that make them a notable entrepreneur and Describe how their good/service contributed to economic progress and Share what economic obstacles they faced in the marketplace that they had to over..

What is the current bond price : Ninja Co. issued 10-year bonds a year ago at a coupon rate of 8.8 percent. The bonds make semi-annual payments. If the YTM on these bonds is 7.1 percent, what is the current bond price? Also how would I enter this in a finical?

Calculate the cost of preferred stock and common stock : Apple Corporation wants to issue bonds with a 9% coupon rate, a face value of $1,000, and 12 years to maturity. Apple estimates that the bonds will sell for $1,090 with issuing (floatation costs equal $15 per bond – this reflects an 8% before tax cos..

User Account

All Pages