KToyota will bring hybrid electric automobiles to market next year priced at $34,000 (this includes a $8,500 federaltax credit) At $1.98 per gallon of gasoline, it will take 8 years to recoup the difference in price between a base modelToyota Camry and its four-cylinder gasoline-only counterpart The price difference is $3,040 If the hybrid vehicle isdriven for 10 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)

Price difference$ 3040Payback period for the difference amount8yearsDriven years10years

Answered: Toyota will bring hybrid electric…

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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Similar questions

Amphenol manufactures motor power connectors and is considering upgrading the production equipment to reduce costs over a 6-year planning horizon. The company can invest $80,000 now (year 0), 1 year from now, or 2 years from now. Depending on when the investment is made, the savings will vary. The savings estimates are $25,000, $26,000, and $29,000 per year for investing now, year 1, and year 2, respectively. If the company’s MARR is 20% per year, use an FW analysis to determine if the timing of the investment will return at least 20% per year.
Dunder Mitfin plans to install a computer system to measure the dimensions of products so thar the proper size boxes can be used to ship items. This well save packing materials, cardboard, and labor. If the savings will be $132310 the first year and increases by $ 9521each year for 9 years. What is the present worth of the system at an interest rate of 12%.Write your answer to two decimal places
4
Standby power for a manufacturing firm is currently produced using diesel-powered generators. In three years the company can switch to natural gas-powered generators. The company believes it can save $29,02 per year through year 7. If the company uses an interest rate of 5%, what is the present value at time 0 of the projected savings that will occur in years 3 through 7?
You are considering two cars that you plan on making for 5 years. One has an EPA combined city and highway rating of 33 mpg. The second has an EPA rating of 36 mpg. Suppose gasoline costs $3.47 per gallon and you drive $10,000 miles each year. (Round your answer to the nearest cent.) (a) How much (in dollars) will you save in 1 year by purchasing the 36 mpg car? (b) If you deposit that amount at the end of each year for 5 years of ownership into account that earns 4.8% compounded annually, how much (in dollars) will you save over 5 years?
Elijah Enterprises will need to upgrade the computer system in 6 years. They anticipate the upgrade to cost $95,300. If the discount rate is 15%, what will be the required yearly investment needed to obtain the money for the upgrade?Round your (1+R)^n value to 2 decimal places and use that number for your final amount required rounded to the nearest dollar. Future Value / (1+R)^n = Amount Required / = What would be required if the discount rate was 8%? Future Value / (1+R)^n = Amount Required / =
HT Bowling, Inc is considering the purchase of VOIP phone system. It will require an initial investment of $29,500 and $9,000 per year in annual operating costs over the equipment's estimated useful life of 4 years. The company will use a discount rate of 11%. What is the equivalent annual cost? $3,460 O $12,623 O $26,810 O $18,509
Spending $1,500 more today for a hybrid engine rather than a gasoline engine will result in annual fuel savings of $300. How many years must this savings continue in order to justify the extra investment if money is worth 10% per year, compounded annually?
Andes, Inc. is considering the replacement of its manual material handling equipment with autonomous vehicles at a net initial cost of $12 million. The expected annual savings in operating costs are as shown below. MARR is 10% per year compounded annually. End of Year 1 2 3 4 5 6 3 4.5 4.5 Annual savings (millions) | 2.25 | 2.25 | 3 Compute the simple payback period for this replacement option. Determine the discounted payback period (DPBP). It is enough if you determine in which year the DPBP falls.
A seaI firm Trodent’s customers expects to decrease downtime by 0.3 as a result of the new seal design. If Iost production would have cost the company $110,000 per year for the next four years, how much could the company afford to spend now on the new seals, if it uses an interest rate of 0,1 2 per year?
RVC makes a control valve regulator. How much can the company afford to spend now on new equipment in lieu of spending $75,000 four years from now? The company's rate of return is 12% per year.
Consider a machine that costs P20,000 and has a five years useful life. At the end of the five years, it can be sold for P4,000 after tax adjustment. The annual operating and maintenance (O&M) costs are about P50o. If the firm could earn an after-tax revenue of P5,000 per year with this machine, should it be purchased at an interest rate of 10%?

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