Hybrid cars are touted as a "green" alternative; however, the financial aspects of hybrid ownership are not as clear

Hybrid cars are touted as a "green" alternative; however, the financial aspects of hybrid ownership are not as clear. Consider a hybrid model that has a list price of $5,500 (including tax consequences) more than a comparable car with a traditional gasoline engine. Additionally, the annual ownership costs (other than fuel) for the hybrid were expected to be $420 more than the traditional model. The EPA mileage estimate is 23 mpg for the traditional model and 25 mpg for the hybrid model. Assume the appropriate interest rate is 10 percent, all cash flows occur at the end of the year, you drive 15,900 miles per year, and keep either car for 6 years. What price per gallon would make the decision to buy they hybrid worthwhile?    A.  $18.79 B.  $21.48 C.  $27.19 D.  $28.32 E.  $30.43

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In an effort to capture the large jet market, Hiro Airplanes invested $12.68 billion developing its B490, which is capable of carrying 800 passengers. The plane has a list price of $275 million. In discussing the plane, Hiro Airplanes stated that the company would break-even when 246 B490s were sold. Assume the break-even sales figure given is the cash flow break-even. Suppose the sales of the B490 last for only 9 years. How many airplanes must Hiro Airplanes sell per year to provide its shareholders a 19 percent rate of return on this investment?    A.  47.17 B.  52.48 C.  59.09 D.  63.10 E.  68.40 Cash flow per plane = $12,680,000,000/246 = $51,544,715 C = Annual cash flow necessary to deliver a 19 percent return