For each vehicle, what is the present value of operating and maintenance costs? What is the...

 

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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

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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