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Are you thinking of bypassing a gasolinefueled car in favor of a hybrid (gasoline and electric) automobile? Let's take a look at the relative economics of your possible choice. The gasoline-fueled car

Are you thinking of bypassing a gasolinefueled car in favor of a hybrid (gasoline and electric) automobile? Let's take a look at the relative economics of your possible choice. The gasoline-fueled car sells for $21,000 and gets 25 miles per gallon (mpg) of fuel. The alternative hybrid vehicle sells for $26,000 and averages 56.8 mpg. The resale value of the hybrid car is $2.000 more than that of the gasoline-only car after five years of anticipated ownership. If you drive 14,000 miles per year and gasoline costs $3.50 per gallon, what is the internal rate of return on the incremental investment in the hybrid automobile? The internal rate of return is %. (Round to one decimal place.)

Apr 12 2021 View more View Less

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