Payback Period and NPV of Alternative Automobile Purchase Wendy Li decided to purchase a new Honda lCivic. Being concerned about environmental issues she is leaning toward a Honda lCivic Hybrid rather than the completely gasoline- powered LX model. Nevertheless, she wants to determine if there is an economic justification for purchasing the Hybrid, which costs $5,100 more than the LX. Based on a mi}: of city and highway driving she predicts that the average gas mileage of each car is 40 MPG for the Hybrid and 30 MPG for the LX. Wendy also anticipates she will drive an average of 12,000 miles per year and that gasoline will cost an average of $3.30 per gallon over the next four years. She also plans to replace whichever car she purchases at the end of four years when the resale values of the Hybrid and the LX are predicted to be $12,000 and $8,500 respectively. Required a. Determine the payback period of the incremental investment associated with purchasing the Hybrid. Qnswer years b. Determine the net present value of the incremental investment associated with purchasing the Hybrid at a ten percent time value of money. 03$ Use a negative sign with your answer, if appropriate. Round answer to the nearest whole number. 6 $