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The MRSP (manufacturer recommended selling price) for a 2019 Ford Fusion SE is $24,120 with an expected fuel economy of 25 miles per gallon of
The MRSP (manufacturer recommended selling price) for a 2019 Ford Fusion SE is $24,120 with an expected fuel economy of 25 miles per gallon of gasoline. The MSRP for a 2019 Ford Fusion Hybrid SE is $27,555 with an expected fuel economy of 40 miles per gallon of gasoline. With the exception of purchase price and annual fuel cost, all other costs are expected to be the same for both vehicles (including eventual market value). a) If you expect to drive 15,000 miles per year, at what average cost of gasoline ($/gallon) would you be indifferent between the vehicles? Your study period is five years and your MARR = 6%. b) Knowing that the current average cost of gasoline is $2.50 per gallon, which vehicle would you purchase? Justify your decision
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