Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
4.75 $ 4.89 $ 1 0 5.04 $ 2 5.19 $ 5.35 $ 4 3 31 Year 32 Nominal Annual Fuel Cost XLE HYBRID 33
4.75 $ 4.89 $ 1 0 5.04 $ 2 5.19 $ 5.35 $ 4 3 31 Year 32 Nominal Annual Fuel Cost XLE HYBRID 33 Nominal Annual Fuel Cost XLE Gas 34 Nominal Annual Fuel Cost Savings 35 PV of Annual Fuel Cost Savings 36 PV of Hybrid Resale Value Premium of $1,800 37 PV of Cash Savings + PV of Hybrid Resale Value Premium 38 Difference in Initial Investment 39 NPV 40 41 Once completed answer the following questions. 42 1. With the given data, what is your NPV for buying the Hybrid instead of the Gas version? Is it worth it to pay the extra money to buy the Hybrid? Is it worth it? 43 NPV 44 2. If you changed your assumption on how much you would drive from 15,000 miles/year to 9,000 miles/year what your NPV be? Would it still be worth the added investment for the hybrid? NPV Is it worth it? 45 46 3. Please change back your assumption to 15,000 miles/year. NOW, If you changed your assumption on your Disc. Rate from 6% to 13% what your NPV be? Would the hybrid be worth it? 47 NPV Is it worth it? 48 49 50 51 52 53 5.51 $ 5.67 $ 5 6 M
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started