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Cost - volume - profit analysis can also be used in making personal financial decisions. For example, the purchase of a new car is one
Costvolumeprofit analysis can also be used in making personal financial decisions. For example, the purchase of a new car is one of
your biggest personal expenditures. It is important that you carefully analyze your options.
Suppose that you are considering the purchase of a hybrid vehicle. Let's assume the following facts. The hybrid will initially cost an
additional $ above the cost of a traditional vehicle. On average, the hybrid will get miles per gallon of gas, and the traditional
car will get miles per gallon. Also, assume that the cost of gas is $ per gallon.
Using the facts above, answer the following questions.
a
For gasoline, what is the unit variable cost of going one mile in the hybrid car? What is the unit variable cost of going one mile in
the traditional car? Round answers to decimal places, eg
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