Capital Budgeting Activity – Select two car models that are similar
Capital Budgeting Activity
Having Trouble Meeting Your Deadline?
Get your assignment on Capital Budgeting Activity – Select two car models that are similar completed on time. avoid delay and – ORDER NOW
In this Capital Budgeting Activity, you will be evaluating whether you should purchase a hybrid car or its gasoline-engine counterpart. Select two car models that are similar, with one being a hybrid model and one being the non-hybrid model. For example, the Honda Civic is available as a hybrid or a gasoline-engine model. Use the Federal Reserve Bank Prime Loan rate Links to an external site. for your discount interest rate. Assume that you plan on keeping your car for 10 years and that the resale value of both models will be negligible. Assume the loan period is for 10 years as well.
https://www.federalreserve.gov/releases/g19/current/default.htm
instructions:
1. Cite all sources used within the text body and end reference following the APA 7th APA is included in Microsoft Word processor—this Links to an external site. is helpful to learn how to use it.
2. Show ALL calculations in good form within the body of the text. DO NOT USE EXCEL FORMULAS.
3. Write your conclusion and decision for each question using full sentences. Seek help from the
4. Pay attention to the instructions given for each question. Answer each questions carefully.
5. SUBMIT YOU PROJECT AS A PDF FILE IN Canvas Turnitin.
Required: (Total points: 100)
1. ( 15 points) Research the cost of each model (include estimated taxes and title costs). Also, obtain an estimate of the miles-per-gallon fuel efficiency of each model.
2. ( 10 points) Estimate the number of miles you drive each year. Also, estimate the costs of a gallon of fuel.
3. ( 15 points) Given your previous estimate from 1 and 2, estimate the total cost of driving the hybrid model for one year. Also, estimate the total cost of driving the non-hybrid model for one year. Calculate the savings offered by the hybrid model over the non-hybrid model.
4. ( 15 points) Calculate the NPV of the hybrid model, using the annual fuel savings as the annual cash inflow for the 10 years you would own the car.
5. ( 10 points) Compare the NPV of the hybrid model with cost of the cost of the gasoline-engine model. Which model has the lowest NPV? From a financial standpoint, does the hybrid model make sense?
6. ( 15 points) Now look at the payback period of the hybrid model. Use the difference between the cost of the hybrid model and the gasoline-engine model as the investment. Use the annual fuel savings as the expected annual net cash inflow. Ignoring the time value of money, how long does it take for the additional cost of the hybrid model to pay for itself through fuel savings?
7. ( 10 points) What qualitative factors might affect your decision about which model to purchase?
8. ( 10 points) Include professional reference of all sources used.
Explanation & AnswerOur website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Order Now and we will direct you to our Order Page at Litessays. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.