HW #11 (2 of 2) • Written Assignment (continued): - UK9 [8 pts] The federal government is providing a $7500 cash rebate to people who buy qualified electric vehicles. Assume: • Consumer choosing between Hyundai Kona vs Kona Electric, SE Edition • Cost to government is cost of rebate • Benefit to consumers is reduced annual operating costs • Use AAA estimates: https://www.aaa.com/autorepair/articles/true-cost-of-ev Consumer disbenefit is added cost to consumers to buy electric cars - For added cost, use Kelly Blue Book values https://www.kbb.com/compare-cars/ Some or all of increased cost is offset by receipt of tax credit Can assume credit received at time of purchase Assume car life = 8 years Assume resale value at 8 years = 50% of purchase price For a 2024 car purchased now, and ignoring environmental benefits, calculate a conventional B/C ratio from the federal government's perspective, assuming i = 5%
HW #11 (2 of 2) • Written Assignment (continued): - UK9 [8 pts] The federal government is providing a $7500 cash rebate to people who buy qualified electric vehicles. Assume: • Consumer choosing between Hyundai Kona vs Kona Electric, SE Edition • Cost to government is cost of rebate • Benefit to consumers is reduced annual operating costs • Use AAA estimates: https://www.aaa.com/autorepair/articles/true-cost-of-ev Consumer disbenefit is added cost to consumers to buy electric cars - For added cost, use Kelly Blue Book values https://www.kbb.com/compare-cars/ Some or all of increased cost is offset by receipt of tax credit Can assume credit received at time of purchase Assume car life = 8 years Assume resale value at 8 years = 50% of purchase price For a 2024 car purchased now, and ignoring environmental benefits, calculate a conventional B/C ratio from the federal government's perspective, assuming i = 5%
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 47P
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Please use excel in answer
![HW #11 (2 of 2)
• Written Assignment (continued):
-
UK9 [8 pts] The federal government is providing a $7500 cash rebate to people
who buy qualified electric vehicles. Assume:
•
Consumer choosing between Hyundai Kona vs Kona Electric, SE Edition
•
Cost to government is cost of rebate
• Benefit to consumers is reduced annual operating costs
•
Use AAA estimates: https://www.aaa.com/autorepair/articles/true-cost-of-ev
Consumer disbenefit is added cost to consumers to buy electric cars
-
For added cost, use Kelly Blue Book values
https://www.kbb.com/compare-cars/
Some or all of increased cost is offset by receipt of tax credit
Can assume credit received at time of purchase
Assume car life = 8 years
Assume resale value at 8 years = 50% of purchase price
For a 2024 car purchased now, and ignoring environmental benefits, calculate a
conventional B/C ratio from the federal government's perspective, assuming i = 5%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F58a386a0-ae96-45f8-b389-fb38c4a62a15%2F058e2308-d0ad-4be6-bea2-1c8908d14839%2Fhsu5so_processed.png&w=3840&q=75)
Transcribed Image Text:HW #11 (2 of 2)
• Written Assignment (continued):
-
UK9 [8 pts] The federal government is providing a $7500 cash rebate to people
who buy qualified electric vehicles. Assume:
•
Consumer choosing between Hyundai Kona vs Kona Electric, SE Edition
•
Cost to government is cost of rebate
• Benefit to consumers is reduced annual operating costs
•
Use AAA estimates: https://www.aaa.com/autorepair/articles/true-cost-of-ev
Consumer disbenefit is added cost to consumers to buy electric cars
-
For added cost, use Kelly Blue Book values
https://www.kbb.com/compare-cars/
Some or all of increased cost is offset by receipt of tax credit
Can assume credit received at time of purchase
Assume car life = 8 years
Assume resale value at 8 years = 50% of purchase price
For a 2024 car purchased now, and ignoring environmental benefits, calculate a
conventional B/C ratio from the federal government's perspective, assuming i = 5%
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