Payback Period and NPV of a Cost Reduction Proposal-Differential Analysis Mary Zimmerman decided to purchase a new automobile. Being concerned about environmental issues, she is leaning toward the hybind rather than the completely gasoline four-cylinder model. Nevertheless, as a new business school graduate, she wants to determine if there k an econoenic warification for purchasing the hybrid, which costs $1,600 more than the regular VuE. She has determined that citymighway combined gas mileage af the Genen VuE and regutar VUE models are 27 and 23 miles per gallon respectively. Mary anticipates she will travel an average of 12.000 miles per year for the nert several year. (Round all of your answers to two decimal places. For example, enter 8.84 for 8.844 and 8.85 for 8.845 .) (a) Determine the payback period of the incremental investment if gasoline costs $3.50 per gallon. x years (b) Assuming that Mary plans to keep the car five years and does not belleve there will be a trade-in premium associated withthe hybrid model, determine the ner present value of the incremental investment at an eight percent time value of money. (Use a negative sign with your answer.) (c) Determine the cost of gasoline required for a payback period of three years. s. pergallon (d) At \$3.50 per gallon, determine the VUE Green combined gas mileage required for a payback period of three years. x miles per gallon