Hybrid cars are touted as green alternatives

Assignment Help Financial Management

Reference no: EM13943584

Hybrid cars are touted as green alternatives; however, the financial aspects of hybrid ownership are not as clear. Consider a hybrid model that has a list price of $5,500 (including tax consequences) more than a comparable car with a traditional gasoline engine. Additionally, the annual ownership costs (other than fuel) for the hybrid were expected to be $420 more than the traditional model and 25 mpg for the hybrid model. Assume the appropriate interest rate is 10, all cash flows occur at the end of the year, you drive 15,900 miles per year, and keep either car for 6 years. What price per gallon would make the decision to buy the hybrid worthwhile?

Reference no: EM13943584

Questions Cloud

The common stockholders of a corporation : The common stockholders of a corporation

Concept would be appropriate for a sole proprietorship : What business concept would be appropriate for a sole proprietorship, a corporation, and a limited liability company, respectively? If you were opening your dream business, what structure would you select? Why?

Make the decision to buy the hybrid worthwhile : Hybrid cars are touted as green alternatives; however, the financial aspects of hybrid ownership are not as clear. Consider a hybrid model that has a list price of $5,500 (including tax consequences) more than a comparable car with a traditional gaso..

Retire outstanding bonds in the next planning period : A firm plans to retire outstanding bonds in the next planning period. the statements that will be affected are the: a. pro forma balance sheet and cash budget b.pro forma income statement and pro forma balance sheet c. cash budget and statement of re..

Hybrid cars are touted as green alternatives : Hybrid cars are touted as green alternatives; however, the financial aspects of hybrid ownership are not as clear. Consider a hybrid model that has a list price of $5,500 (including tax consequences) more than a comparable car with a traditional gaso..

What is the value of common stock today : Cayman Corporation just paid a dividend of $4.00 on its common stock. Expectations for growth in earnings are expected to be unusually high over the next 2 years. As such, Cayman expects its dividend to grow at a rate of 30% over the next 2 years aft..

Set number of shares on a set date for a specific price : ________________ are when the firm buys back a set number of shares on a set date for a specific price.

Any signalling effects of dividends should occur : Any signalling effects of dividends should occur on the ____________

Share of their stock for every share of target firms stock : Suppose that prior to a merger the stock price of the target company was $50 and the stock price of the acquiring company was $40. If the acquiring firm agrees to pay 1.5 share of their stock for every share of the target firms stock, then what premi..

User Account

All Pages