For each vehicle, what is the present value of operating and maintenance costs? What is the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
For each vehicle, what is the present value of operating and maintenance costs? What is the present value of the resale value (in present dollars) of each vehicle? Assume that over the lifetime of the vehicles, the projected fuel costs remain constant. 2. Based on your analysis, which vehicle is less costly? How much do you save (in present dollars) by choosing the cheaper option? 3. Battery replacement costs for the Prius in the future are uncertain, and it is possible that 8 years from the purchase date the replacement costs may be much lower than we are predicting today. How much would a battery replacement in 2021 dollars have to cost to change your answer in 2? It is 2013 and you are deciding between purchasing a Toyota Corolla and a Toyota Prius. Parameter Miles/gallon Purchase cost Miles driven/day Resale value Fuel costs $/gal, projected Battery replacement cost (after 8 years) Years of car ownership Discount rate 40 $23,000 $4,000 $4.50 N/A Corolla 45 $25,000 50 miles $6,000 $4.25 $5000 12 years 6% Prius For each vehicle, what is the present value of operating and maintenance costs? What is the present value of the resale value (in present dollars) of each vehicle? Assume that over the lifetime of the vehicles, the projected fuel costs remain constant. 2. Based on your analysis, which vehicle is less costly? How much do you save (in present dollars) by choosing the cheaper option? 3. Battery replacement costs for the Prius in the future are uncertain, and it is possible that 8 years from the purchase date the replacement costs may be much lower than we are predicting today. How much would a battery replacement in 2021 dollars have to cost to change your answer in 2? It is 2013 and you are deciding between purchasing a Toyota Corolla and a Toyota Prius. Parameter Miles/gallon Purchase cost Miles driven/day Resale value Fuel costs $/gal, projected Battery replacement cost (after 8 years) Years of car ownership Discount rate 40 $23,000 $4,000 $4.50 N/A Corolla 45 $25,000 50 miles $6,000 $4.25 $5000 12 years 6% Prius
Expert Answer:
Answer rating: 100% (QA)
To compare the costs of the Toyota Corolla and the Toyota Prius we need to calculate the present value of operating and maintenance costs and the pres... View the full answer
Related Book For
Cost Management A Strategic Emphasis
ISBN: 978-0078025532
6th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
Posted Date:
Students also viewed these accounting questions
-
You have just had a tenant sign a lease contract that guarantees you payments of $100,000 at the end of each year for the next five years. What is the present value of these future cash flows...
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
For each problem, show your work steps. A correct answer with no work shown gets half credit (which means you fail the assignment). An incorrect answer with no work receives 0 credit. With time value...
-
What is the probability that the number X of successes in the personnel managers sample of 100 employees in question 10 will be 48 or more?
-
The General Social Survey asked: "How many e-mails do you send in a day?" The results of 928 respondents indicate that the mean number of e-mails sent in a day is 10.4, with a standard deviation of...
-
Poundmaker Company just had a fire in its warehouse that destroyed all of its merchandise inventory. The insurance company covers 80% of the loss. The following information is available regarding the...
-
1. Determine \(40 \%\) of 300 . 2. Determine \(64 \%\) of 190 .
-
Carmin Kovach is single and has two children from her previous marriage. Anika, 9, lives with Carmin. Julius, 11, lives with his father, Ray. Carmin pays alimony of $400 per month to Ray. The...
-
Jerell Company issued 20,000 shares of its P10 par value ordinary share and 40,000 shares of its P10 par value convertible preference share for a total of of P1,800,000. At this date, Jerell's...
-
Macon Machines Company began operations on November 1, 2024. The main operating goal of the company is to sell high end robots. Customers may pay using cash or if appropriate, credit is extended to...
-
Re 1. Pharoah purchased a patent from Vania Co. for $1,150,000 on January 1, 2023. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2033. During 2025,...
-
Gregg Office Equipment Co. has a fleet of automobiles and trucks for use by salespersons and for delivery of office supplies and equipment. Bridger Auto Sales Co. has automobiles and trucks for sale....
-
How should (a) fixed assets and (b) intangible assets be reported in the balance sheet?
-
_____ is corrective action to get employees to meet standards and the code of conduct.
-
The financial statements of La-Z-Boy Chair Company contain the following footnote: The Company has several long-term leases covering manufacturing facilities. The lease agreements require the Company...
-
_____ is the process of transmitting information and meaning.
-
If you buy a home with less than 2 0 % down, you will pay an additional monthly fee, PMI ( private mortgage insurance ) , until you reach 2 0 % equity. Keep track of when you reach 2 0 % equity so...
-
Why is it important to understand the macro-environment when making decisions about an international retail venture?
-
Tastyfreeze Company is a small producer of fruitflavored frozen desserts. For many years, its products have had strong regional sales because of brand recognition; however, other companies have begun...
-
Bubba's Western Wear is a western hat retailer in Lubbock, Texas. Although Bubba's carries numerous styles of western hats, each hat has approximately the same price and invoice (purchase) cost, as...
-
Explain the difference between the engineered cost and discretionary cost approaches to evaluating support departments.
-
Repeat the solution of Problem 12 for the case when the flow is unsteady and the problem is solved using the fully implicit time discretization (the simple implicit scheme).
-
Modify the predictor-corrector formulas (10.27)-(10.30) for the method that uses the second-order Adams-Bashforth time-integration scheme (see Section 7.4.1) instead of the simple explicit scheme.
-
Compare the four algorithms described in Section 10.4 (SIMPLE, SIMPLER, SIMPLEC, PISO) by the amount of computations required for one iteration. Does the smaller amount necessarily mean smaller time...
Study smarter with the SolutionInn App