1.A battery electric Vauxhall Ampera costs 39,995 before including the 5,000 government purchase subsidy. A Ford Focus diesel with a fuel consumption of 53 mpg costs 15,450. Assume the average motorists does 12000 miles per year and diesel fuel costs 1.50 per litre. Also, assume that electricity is free and that the Ampera driver manages to use a negligible amount of petrol by running entirely on plug-in electricity.

a)Calculate the payback time for the Vauxhall Ampera to repay the additional cost compared to a diesel Focus, with and without the subsidy.

b)If the Ampera battery has a life of 10 years and costs 20,000 to replace, calculate the whole life difference in cost of the Ampera compared with a Ford Focus over a 20 year operating life (i.e. consider only the case without subsidy)

Note: 1 gallon = 4.546 litres