Question
Cost Benefit Analysis over 10 years Do a cost benefit analysis to decide wheteher to switch from a gas car to an electric car. HINT
Cost Benefit Analysis over 10 years
Do a cost benefit analysis to decide wheteher to switch from a gas car to an electric car.
HINT: Make cash flow table for 10 years reflecting the total savings of switching from gas car to electric car
The government is offering an incentive of $11,000 for trading your gas car in and buying an electric vehicle
Assume that cost of gas will increase by 5% each year
You must include NPV and IRR for both comparisons in excel AND make a reccommendation
Interest rate = 4.50%
(you are free to make any other assumtions or rates you make, but be sure to clearly list them)
Electric Vehicle | Gas Car | |||
Cost of Electric Car | 15,000 | |||
Electricity cost per kWh | 0.125 | cost of fuel per gallon | 4.16 | |
EV electricity consumption - kWh per mile | .483kWh/m | mpg | 28.6 | |
eFuel Cost / mile | 0.06 | Gas Cost / mile | 0.15 | |
# of miles driven per year | 8,500 | # of miles driven per year | 8,500 | |
Total Fuel Costs / yr | 513.19 | Total Fuel Costs / yr | 1,236.36 | |
Maintenance Costs | 485.00 | Maintenance Costs | 1,500.00 | |
Total Cost / yr | 998.19 | Total Cost / yr / car | 2,736.36 | |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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