Miles/gallorn Purchase cost Miles driven/da Resale value Jetta (Diesel 40 $23,00

Question

Miles/gallorn Purchase cost Miles driven/da Resale value Jetta (Diesel 40 $23,000 50 $4,000 $4.50 Toyota Prius 45 $25,000 50 S4.25 S5000 Fuel costs S ected Battery replacement cost (after 8 12 Years of car ownershi Discount rate 5% Which car is the better deal for the long run. For each vehicle CRF(6%, 12 yrs) = 0.1193/yr Calculate the present value (PV) of each vehicle for resale? (PV-Future Value/ (1+discountr Which vehicle would you purchase? How much money you will save? wwPresent value is compound interest in reverse: finding the amount you would need to invest today in order to have a specified balance in the future. Among other places, it's used in the theory of stock valuation

Explanation / Answer

Answer:

Calculation of value of cash outlay

Calculation of present value of cash outlay

39605.81

Based on present value of cash outlay First car is better  

Particulars Jetta car amount Toyota car amount Purchase cost 23000 25000 Miles driven per day 50 50 Miles driven per year 18250 18250 Miles/gallon 40 45 gallon cost 4.5 4.25 Fuel cost per year 2053.13 1723.61

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