A concept car that will get 100 miles per gallon and carry four persons would have a carbon-fiber and aluminum composite frame with a 900 cc three-cylinder turbodiesel/electric hybrid power plant. The extra cost of these technologies is estimated to be $11,000. (a) If gasoline savings over a comparable conventional car would be $900 in year one, increasing by 10% each year, what is the present worth of the savings over a 10-year period at an interest rate of 8% per year? (b) Compare the present worth values to determine if the extra cost is recovered by fuel savings.

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A: Referencehttps://www.investopedia.com/terms/n/npv.asp

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.