Answer to Question #144419 in Finance for Bria

Question #144419
Question 3
Fabrice is looking to buy a new plug-in hybrid vehicle. The purchase price is $14,000 more than a similar conventional model. However, he will receive a $6,300 federal tax credit that he will realize at the end of the year. He estimates that he will save $1,300 per year in gas over the conventional model; these cash outflows can be assumed to occur at the end of the year. The cost of capital (or interest rate) for Fabrice is 6%. How long will Fabrice have to own the vehicle to justify the additional expense over the conventional model? In other words, what is the DISCOUNTED payback period in years? Discount future cash flows before calculating payback rounded UP to a whole year. (Enter just the number without comma and round off decimals.)
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Expert's answer
2020-11-17T07:25:44-0500
Dear Bria, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order

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