Toyota will bring hybrid electric automobiles to market next year priced at $29,000 (this includes a $7,250 federal tax credit). At $1.91 per gallon of gasoline, it will take 11 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is $3,960 . If the hybrid vehicle is driven for 15 years, what is the internal rate of return on the extra investment in the hybrid?
Toyota will bring hybrid electric automobiles to market next year priced at $29,000 (this includes a $7,250 federal tax credit). At $1.91 per gallon of gasoline, it will take 11 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is $3,960 . If the hybrid vehicle is driven for 15 years, what is the internal rate of return on the extra investment in the hybrid?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Toyota will bring hybrid electric automobiles to market next year priced at
$29,000
(this includes a
$7,250
federal tax credit). At
$1.91
per gallon of gasoline, it will take 11 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is
$3,960
. If the hybrid vehicle is driven for 15 years, what is the
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