Business, 12.05.2021 01:00 electrofy456

Payback Period and NPV of Alternative Automobile Purchase Wendy Li decided to purchase a new Honda Civic. Being concerned about environmental issues she is leaning toward a Honda Civic Hybrid rather than the completely gasoline-powered LX model. Nevertheless, she wants to determine if there is an economic justification for purchasing the Hybrid, which costs $5,100 more than the LX. Based on a mix of city and highway driving she predicts that the average gas mileage of each car is 40 MPG for the Hybrid and 30 MPG for the LX. Wendy also anticipates she will drive an average of 12,000 miles per year and that gasoline will cost an average of $2.75 per gallon over the next four years. She also plans to replace whichever car she purchases at the end of four years when the resale values of the Hybrid and the LX are predicted to be $12,000 and $8,500 respectively.
Required:
a. Determine the payback period of the incremental investment associated with purchasing the Hybrid.
b. Determine the net present value of the incremental investment associated with purchasing the Hybrid at a ten percent time value of money.
c. Determine the cost of gasoline required for a payback period of three years on the incremental investment.

Answers: 2

Show answers

Other questions on the subject: Business

Business, 21.06.2019 21:00, dasiaflowers85

Identifying transactions national park tours co. is a travel agency. the nine transactions recorded by national park tours during may 2019, its first month of operations, are indicated in the following t accounts: cash (1) 75,000 (2) 900 (7) 8,150 (3) 1,600 (4) 6,280 (6) 2,700 (9) 2,500 accounts receivable (5) 12,300 (7) 8,150 supplies (2) 900 (8) 660 equipment (3) 8,000 accounts payable (6) 2,700 (3) 6,400 beth worley, capital (1) 75,000 beth worley, drawing (9) 2,500 fees earned (5) 12,300 operating expenses (4) 6,280 (8) 660 indicate for each debit and each credit (a) whether an asset, liability, owner's equity, drawing, revenue, or expense account was affected and (b) whether the account was increased (+) or decreased account debited account credited transaction type effect type effect (1) (2) (3) (4) (5) (6) (7) (8) (9)

Answers: 3

continue

Business, 22.06.2019 07:30, ingle75

Fill in the missing words to correctly complete each sentence about analyzing a job posting. when reviewing a job posting, it’s important to check theto determine whether it’s worth your time to apply. if the post has been up for a while or it’s already closed, move on to the next position. if it’s still available, take note of when it closes so you’ll know when you mayfrom the company in regard to an interview.

Answers: 1

continue

Business, 22.06.2019 15:00, samanthamunevar7218

Which of the following is least likely to a team solve problems together

Answers: 1

continue

Business, 22.06.2019 19:00, nativebabydoll35

In north korea, a farmer’s income is the same as a dentist’s income. in a country with a mixed or market economy, the difference between those two professions might be more than 5 times different. how can you explain the fact that individuals doing the same work in different countries do not earn comparable salaries?

Answers: 1

continue

You know the right answer?

Payback Period and NPV of Alternative Automobile Purchase Wendy Li decided to purchase a new Honda...