You have landed your dream job and after 6 months your boss is giving you a BIG bonus. It’s now the time to upgrade your transportation and purchase your FIRST NEW CAR.

You test drive a variety of cars and now it’s decision-making time.

You must choose between:

• Electric Vehicle

• Traditional Gas Guzzler Car

Compare and contrast your two options focusing on COST and ENVIRONMENTAL IMPACT. Respond to the following questions:

1. Research the cost of each model (including taxes and title).

2. Estimate the total cost of driving each model for one year. (Estimate the annual cost of fuel and/or electricity for driving 10,000 miles per year). Ignore the cost of repairs and maintenance.

3. Calculate the cost savings offered by one model over the other model. (Purchase price, annual cost of driving each model).

4. Calculate the NPV of the electric model using the annual savings in energy costs as the annual cash inflow for the 10 years you would own the car.

5. Compare the present value of the annual savings in energy cost over 10 years with the difference in price of the two vehicles.

6. What environmental (sustainability) factors might affect your decision about which model to purchase?