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A driver needs new tires for her car and is trying to decide if she should purchase low rolling resistance tires. The regular tires cost
A driver needs new tires for her car and is trying to decide if she should purchase low rolling resistance tires. The regular tires cost $300 (for all 4 tires) and will last 3 years. The low rolling resistance tires cost $400 and will also last 3 years, saving $50 per year in gas.
What is the NPV for choosing the low rolling resistance tires if the expected return she is getting on her investments is 10%?
(Do not round intermediate numbers. Round final answer to the nearest dollar and do not enter a dollar sign)
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