# Universite De Paris Capital Budgeting Activity Worksheet

Don't use plagiarized sources. Get Your Custom Essay on
Universite De Paris Capital Budgeting Activity Worksheet
Just from \$13/Page

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 rateLinks 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.

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.

Estimate the number of miles you drive each year. Also, estimate the costs of a gallon of fuel.

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.

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.

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?

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?

What qualitative factors might affect your decision about which model to purchase?

Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

## Calculate the price of your order

Total price:
\$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

## Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.