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Pamela recently moved to Celebration, Florida, an unincorporated master-planned community in Osceola County that connects directly to the Walt Disney World parks. To support the
Pamela recently moved to Celebration, Florida, an unincorporated master-planned community in Osceola County that connects directly to the Walt Disney World parks. To support the planned communitys environmentally friendly transit system and to save on transportation costs, she wants to buy a new Neighborhood Electric Vehicle (NEV). She is looking into three models of the NEVs and has been provided with the information below. Compare the alternatives shown and determine which model should be purchased if Pamelas personal MARR is 8% per year.
\begin{tabular}{l|l|l|l} & Dynasty & Might-E & Zenn \\ \hline Initial costs & $13,000 & $13,550 & $14,000 \\ \hline Annual expenses & $4,781 & $5,281 & $6,081 \\ \hline Annual savings & $6,781 & $7,581 & $7,581 \\ \hline Salvage value & $1,300 & $1,600 & $2,000 \\ \hline Life (years) & 10 & 10 & 10 \\ \hline IRR & 9.64% & 11.93% & 3.36% \\ \hline \end{tabular}Step by Step Solution
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