Each student will analyze the purchase decision: should you buy a traditional automobile or a "hybrid or electric" vehicle? Each student will choose two specific vehicle models to compare: one traditional gasoline-powered automobile and one hybrid/electric model.Assume you purchase the vehicle on July 1, 2021 and dispose of it (sell or trade) at the end of 5 years, on June 30, 2026. The objective is to project all cash flows and perform a comprehensive economic analysis to determine the preferred vehicle.

The Analysis

1. Determine the alternatives you will compare. Which two specific vehicles will you compare?

2. Determine estimated cash flows for all expenses associated with the purchase, ownership, and disposal of each vehicle (payments, gasoline or other fuel, maintenance, tires, insurance, personal property tax, sales tax, salvage value, etc.). Consider how you will pay for the vehicle: with cash, lease, bank loan, dealer financing. What about reliability and expected repair costs with or without warranty coverage? You will find a great deal of information on the internet, though make sure you use reliable sources and cite them. Use actual values whenever possible, make estimates when necessary. You will need to make some assumptions to complete the analysis. For instance, you must estimate how many miles the vehicles will be driven each year. Be sure to clearly identify all assumptions and support your values with reasoned explanations. You should present your cash flow estimates in a professional manner...present your cash flow estimates in the spreadsheet. (You may find it useful to divide your cash flows/expenses into categories; for instance 'purchase', 'operating and maintenance', etc.)

3. Using the Systematic Economic Analysis Technique (7 steps) as a framework, complete the economic analysis of the two vehicles. Use the cash flow estimates from 2. above and compare the alternatives using two or more calculation methods (i.e. PW and AW). Recommend your preferred vehicle based on your economic analysis and other relevant considerations.

1 Alternatives to compare: Alternative 1: CHEVAROLET 2021 BOLT EV FWD Alternative 2: CHEVAROLET 2021 TRAX FWD 2 Estimate cash flows for purchase/use/disposal of each altenrative Alternative 1 Personal Fuel (gas or Property Salvage year Pruchase electric) Maintenance Tires Insurance Tax Sales Tax value Repairs 0 $36,620.0 $2,380.3 $480.0 $151.0 $0.0 $1, 118.0 $187.0 $4,813.0 $0.0 2 $494.0 $386.0 $0.0 $1, 157.0 $0.0 $2,271.0 $0.0 $509.0 $202.0 $0.0 $1, 198.0 $86.0 $2, 148.0 $120.0 $525.0 $523.0 $0.0 $1,240.0 $0.0 $2,522.0 $286.0 5 $540.0 $1, 435.0 $0.0 $1,283.0 $86.0 $2, 389.0 $415.0 Alternative 2 Personal Fuel (gas or Property Salvage year Pruchase electric Maintenance Tires Insurance Tax Sales Tax value repairs 0 $28,595.0 $1,858.7 $1, 469.0 $252.0 $0.0 $790.0 $187.0 $6,637.0 $0.0 $1,513.0 $452.0 $0.0 $818.0 $0.0 $1,448.0 $0.0 AWN $1,558.0 $609.0 $0.0 $846.0 $86.0 $1,370.0 $130.0 $1,605.0 $1,350.0 $0.0 $876.0 $0.0 $1,607.0 $309.0 5 $1,653.0 $1, 451.0 $907.0 $86.0 $1,521.0 $449.0 Include source of data and assumptions realted to each cost category: The data from these two websites: https://www.edmunds.com/chevrolet/bolt-ev/2021/cost-to-own/ https://www.edmunds.com/chevrolet/trax/2021/cost-to-own/?style=401849906 sale tax rate: 6.50% 3 Compare Alternatives NOTE: Use cash flow value estimates above to calculate at least two measures of worth (i.e. PW, AW). Then recommend preferred vehicle based on economic analysis. What other factors might you consdier in making this decision