Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Question
Chapter 14, Problem 7P
(a):
To determine
Conclusion based on dominance.
(b):
To determine
Conclusion based on satisficing.
(c):
To determine
Conclusion based on the disjunctive revolution.
(d):
To determine
Conclusion based on the lexicography.
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EXAMPLE 11-2
Two Alternative Breakeven Analysis: Hybrid Vehicles
Gas-electric (so-called hybrid) vehicles save on gasoline consumption by shutting
off the vehicle's engine while idling, giving the vehicle a boost of electric power
during acceleration, and capturing electrical energy while braking. In addition to
environmental benefits, the primary monetary benefit to the owner is reduced fuel
cost as a result of improved gas mileage. The trade-off, however, is that the purchase
price of the hybrid vehicle is higher than that of a standard gasoline-only fueled
vehicle.
Consider a hybrid vehicle with a sticker price of $31,500. This vehicle will
average 30 miles per gallon of gasoline. A tax credit of $1,500 for the hybrid
vehicle effectively reduces its sticker price to $30,000. A comparably equipped
gasoline-only vehicle will cost $28,000 and will average 25 miles per gallon of
gasoline. Assuming an interest rate of 3% per year and a study period of five years,
find the breakeven cost…
Chapter 14 Solutions
Engineering Economy, Student Value Edition (17th Edition)
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