Chapter 22, Problem 6EYCT

You have just graduated from college and are looking to buy your first car. Money is tight right now, so you are concerned with initial cost as well as ongoing expenses. At the same time, you don't want to drive a slow, outdated car like your parents do. You have narrowed your choices down to two vehicles: a Honda Enigma and a Bizzarrini Booster. Based on the numbers below, calculate the value index for each car. Which car provides you with the greatest value? Click the icon to view the data table. The value index for Honda Enigma is. (Enter your response as a whole number) The value index for Bizzarrini Booster is (Enter your response as a whole number) provides the greatest total value index A The More Info The Dimension Fuel economy Reliability Speed and handling Aesthetics After-sales support Purchase price Honda Enigma Print Bizzarrini Booster Importance to you 3 54424 Honda Enigma value index for each car. Which car provides you with the greatest value? Click the icon to view the…

6. (Note, for this question, you may find information from the live session in Module 4 useful.) You are making a decision about purchasing a new car. You can choose between an electric vehicle that requires very high upfront costs, a somewhat cheaper hybrid vehicle and a traditional gasoline powered vehicle. Your discount rate for future cash flows is 10%. The upfront cost of each car is: Electric: $80,000 Hybrid: $60,000 Gas: $45,000 In the first year you estimate the running costs (including fuel, insurance, maintenance etc.) to be: Electric: $2,000 Hybrid: $5,000 Gas: $7,500 You assume that these costs will increase at an inflation rate of 5%. That is, year 2 costs will be 5% higher than year 1 costs and year 3 costs will be 5% higher than year 2 costs. a) You plan to keep the car for 10 years. For each car, calculate the present value of your costs. Which one ends costing less in present value terms? (1 pt) b) If instead you wanted to replace the car after 5 years, what would now…

Consider the following​ situation, which involves two options. Determine which option is less expensive. Are there unstated factors that might affect your​ decision?   You currently drive 275 miles per week in a car that gets 16 miles per gallon of gas. You are considering buying a new​ fuel-efficient car for ​$15,000 ​(after trade-in on your current​ car) that gets 54 miles per gallon. Insurance premiums for the new and old car are ​$1000 and ​$700 per​ year, respectively. You anticipate spending ​$1400 per year on repairs for the old car and having no repairs on the new car. Assume gas costs ​$4.00 per gallon. Over a​ five-year period, is it less expensive to keep your old car or buy the new​ car?       Question content area bottom Part 1 Over a​ five-year period, the cost of the old car is ​$enter your response here   and the cost of the new car is ​$enter your response here   . ​Thus, over a​ five-year period, it is less expensive to ▼   buy the new car. keep your old…