{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-29T02:09:40-04:00", "answer_date": "2024-06-29 02:09:40", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4445913", "url": "\/study-help\/questions\/payback-period-and-npv-ofa-cost-reduction-proposaldifferential-analysis-hermione-4445913", "question_creation_date_js": "2024-06-29T02:09:40-04:00", "question_creation_date": "Jun 29, 2024 02:09 AM", "meta_title": "[Solved] Payback Period and NPV ofa Cost Reduction | SolutionInn", "meta_description": "Answer of - Payback Period and NPV ofa Cost Reduction ProposalDifferential Analysis Hermione decided to purchase a new automobile. | SolutionInn", "meta_keywords": "payback,period,npv,ofa,cost,reduction,proposaldifferential,analysis,hermione,decided,purchase,new", "question_title_h1": "Payback Period and NPV ofa Cost Reduction ProposalDifferential Analysis Hermione decided to purchase a new automobile. Being concerned about environmental issues, she is leaning toward", "question_title": "Payback Period and NPV ofa Cost Reduction ProposalDifferential Analysis Hermione decided to", "question_title_for_js_snippet": "Payback Period and NPV ofa Cost Reduction ProposalDifferential Analysis Hermione decided to purchase a new automobile Being concerned about environmental issues, she is leaning toward the hybrid rather than the gasoline only model Nevertheless, as a new business school graduate, she wants to determine if there is an economic justification for purchasing the hybrid, which costs $2,200 more than the regular model She has determined that city highway combined gas mileage of the hybrid and regular models are 40 and 30 miles per gallon respectively Hermione anticipates she will travel an average of 15,000 miles per year for the next several years (Round your answers to two decimal places ) (a) Determine the payback period of the incremental investment if gasoline costs $2 60 per gallon 6 77 V years (b) Assuming that Hermione plans to keep the car about six years and does not believe there will be a trade in premium associated with the hybrid model, determine the net present value of the incremental investment at 6 time value of money (Use a negative sign with your answer ) $ (601 85) 8 (c) Determine the cost of gasoline required for a payback period of four years $ 4 4 s per gallon (d) At $4 00 per gallon, determine the gas mileage required for a payback period of four years 41 38 V miles per gallon", "question_description": "
\"image<\/div><\/div><\/div><\/figure> Payback Period and NPV ofa Cost Reduction ProposalDifferential Analysis Hermione decided to purchase a new automobile. Being concerned about environmental issues, she is leaning toward the hybrid rather than the gasoline only model. Nevertheless, as a new business school graduate, she wants to determine if there is an economic justification for purchasing the hybrid, which costs $2,200 more than the regular model. She has determined that city\/highway combined gas mileage of the hybrid and regular models are 40 and 30 miles per gallon respectively. Hermione anticipates she will travel an average of 15,000 miles per year for the next several years. (Round your answers to two decimal places.) (a) Determine the payback period of the incremental investment if gasoline costs $2.60 per gallon. 6.77 V years (b) Assuming that Hermione plans to keep the car about six years and does not believe there will be a trade-in premium associated with the hybrid model, determine the net present value of the incremental investment at 6% time value of money. (Use a negative sign with your answer.) $ (601.85) 8 (c) Determine the cost of gasoline required for a payback period of four years. $ 4.4 s\/ per gallon (d) At $4.00 per gallon, determine the gas mileage required for a payback period of four years. 41.38 V miles per gallon", "transcribed_text": "", "related_book": { "title": "Principles Of Finance", "isbn": "979-8439388899", "edition": "1st Edition", "authors": "Julie Dahlquist, Rainford Knight", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/6290aa2348f9a_11251.jpg", "uri": "\/textbooks\/principles-of-finance-1st-edition-9798439388899", "see_more_uri": "" }, "free_related_book": { "isbn": "1473607442", "uri": "\/textbooks\/selling-in-4-weeks-the-complete-guide-to-success-teach-yourself-1st-edition-9781473607446-9781473607453", "name": "Selling In 4 Weeks The Complete Guide To Success Teach Yourself", "edition": "1st Edition" }, "question_posted": "2024-06-29 02:09:40", "see_more_questions_link": "\/study-help\/questions\/business-finance-2024-September-13", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/write-the-spectral-designations-of-the-terms-of-the-hydrogen", "description": "Write the spectral designations of the terms of the hydrogen atom whose electron is in the state with principal quantum number n = 3.", "stars": 3 }, { "url": "\/study-help\/business-statistics-in-practice\/what-kind-of-design-would-this-be-diagram-the-experiment-1982136", "description": "=+What kind of design would this be? 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