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Toyota will bring hybrid electric automobiles to market next year priced at $34,000 (this includes a $8, 500 federal tax credit). At $2.14 per gallon
Toyota will bring hybrid electric automobiles to market next year priced at $34,000 (this includes a $8, 500 federal tax credit). At $2.14 per gallon of gasoline, it will take 10 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is $4,000. If the hybrid vehicle is driven for 14 years, what is the internal rate of return on the extra investment in the hybrid?
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