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Toyota will bring hybrid electric automobiles to market next year priced at $27,000 (this includes a $6,750 federal tax credit). At $1.91 per gallon of gasoline, it will take 12 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is $4,680. If the hybrid vehicle is driven for 17 years, what is the internal rate of return on the extra investment in the hybrid? The internal rate of return on the extra investment in the hybrid is %. (Round to one decimal place.)

Toyota will bring hybrid electric automobiles to market next year priced at $27,000 (this includes a $6,750 federal tax credit). At $1.91 per gallon of gasoline, it will take 12 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is $4,680. If the hybrid vehicle is driven for 17 years, what is the internal rate of return on the extra investment in the hybrid? The internal rate of return on the extra investment in the hybrid is %. (Round to one decimal place.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Toyota will bring hybrid electric automobiles to market next year priced at $27,000 (this includes a $6,750 federal tax credit). At $1.91 per gallon of gasoline, it will take 12 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is $4,680. If the hybrid vehicle is driven for 17 years, what is the internal rate of return on the extra investment in the hybrid? The internal rate of return on the extra investment in the hybrid is %. (Round to one decimal place.)
Transcribed Image Text:Toyota will bring hybrid electric automobiles to market next year priced at $27,000 (this includes a $6,750 federal tax credit). At $1.91 per gallon of gasoline, it will take 12 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is $4,680. If the hybrid vehicle is driven for 17 years, what is the internal rate of return on the extra investment in the hybrid? The internal rate of return on the extra investment in the hybrid is %. (Round to one decimal place.)
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