A saleman has to decide whether to buy a regular gasolene...

A saleman has to decide whether to buy a regular gasolene vehicle or a hybrid one. He knows that the number of miles driven per year is one of the key determining factors. Given the information below on the two vehicles he is considering, calculate the breakeven number miles per year at a MARR of 8% per year. Gas Vehicle Hybrid Vehicle Purchace Price $24,000 $30,000 Service life 7 years 7 years Market value at end service $4,100 $5,100 Operating cost per mile $0.22 $0.12 The breakeven number of miles per year is ? ?. 10,404 B. 13,525 OC. 12,485 D. 7,803

Transcript

00:01 Hello students, here is a question.

00:02 Hybrid cars are plotted a green alternative.

00:05 However, the financial aspects of a hybrid ownership are not as clear.

00:10 Considering 2018 else of a 550h which has a lease price of 5800 more than the compatible it is 550.

00:20 Additionally, the annual ownership cost for the hybrids were expected to be 500 dollars more than the traditional sedan.

00:27 The eap mileage estimate was 29 mpg for hybrid of 21 mpg of traditional sedan.

00:35 So, our question is assume that gasoline cost is 3 .95 per gallon and the plan to keep our either the car for 6 years, how many miles per year would it need to drive and make the decision to buy an hybrid worthwhile.

00:53 So, ignoring the time value of money, draw round your immediate calculation and round your answers to the nearest whole number.

01:00 So, this is an instruction given in the question.

01:02 So, let us do the solution for this.

01:07 So, first we have to determine how many miles per year would you have to drive to make a decision to buy a hybrid worthwhile.

01:15 So, list of prices are 5800 more than the traditional sales minus annual ownership.

01:21 So, which is 500 more than traditional sedan eps 25 mg for traditional sedan eap mileage is 21 mpg.

01:31 So, first we will calculate the fuel cost of both the cars, fuel cost of both cars.

01:43 So, for the hybrid first we will take hybrid.

01:47 So, it is 29 mpg into 6 years...

Question

Please give Ace some feedback