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ACG 3300: Capital Budgeting Project

Satisfactory Essays
Carmen M. Malebranche 4690390 Summer A ACG 3301 Capital Budgeting Project 1. 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. Estimate the number of miles you drive each year. Also estimate the costs of a gallon of fuel. 3. 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. Calculate the NPV of the hybrid model, using the annual fuel savings as the annual cash inflow for the 10 years you would own…show more content…
What qualitative factors might affect your decision about which model to purchase? I have owned a hybrid model car in the past. The reason that I purchased the car was because I was driving 40 miles to work every day. In this case having a hybrid really did benefit me because on the highway the car would go into the electric mode and save my gas. However, there were many unforeseen problems with my hybrid. Hybrid cars have not been around very long so there is not a long history of what type of maintenance and issue could arise from owning a hybrid car. The Sonata SE has a long history of being a reliable automobile and there have been years for Hyundai to really work out any mechanical issues or features that didn’t work. The hybrid version of the Sonata has not been out enough years to have the track record that the Sonata SE has. For this reason, I would be hesitant on buying the Hybrid version and also because I do not have the necessity for a Hybrid at this time in my life. Also, I do not drive enough to justify paying the price difference for the
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