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HW #11 (2 of 2) • Written Assignment (continued): - UK9 [8 pts] The federal government is providing a $7500 cash rebate to people who buy qualified electric vehicles. Assume: • Consumer choosing between Hyundai Kona vs Kona Electric, SE Edition • Cost to government is cost of rebate • Benefit to consumers is reduced annual operating costs • Use AAA estimates: https://www.aaa.com/autorepair/articles/true-cost-of-ev Consumer disbenefit is added cost to consumers to buy electric cars - For added cost, use Kelly Blue Book values https://www.kbb.com/compare-cars/ Some or all of increased cost is offset by receipt of tax credit Can assume credit received at time of purchase Assume car life = 8 years Assume resale value at 8 years = 50% of purchase price For a 2024 car purchased now, and ignoring environmental benefits, calculate a conventional B/C ratio from the federal government's perspective, assuming i = 5%

HW #11 (2 of 2) • Written Assignment (continued): - UK9 [8 pts] The federal government is providing a $7500 cash rebate to people who buy qualified electric vehicles. Assume: • Consumer choosing between Hyundai Kona vs Kona Electric, SE Edition • Cost to government is cost of rebate • Benefit to consumers is reduced annual operating costs • Use AAA estimates: https://www.aaa.com/autorepair/articles/true-cost-of-ev Consumer disbenefit is added cost to consumers to buy electric cars - For added cost, use Kelly Blue Book values https://www.kbb.com/compare-cars/ Some or all of increased cost is offset by receipt of tax credit Can assume credit received at time of purchase Assume car life = 8 years Assume resale value at 8 years = 50% of purchase price For a 2024 car purchased now, and ignoring environmental benefits, calculate a conventional B/C ratio from the federal government's perspective, assuming i = 5%

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 15RE: GameDay sells recreational vehicles along with secure parking storage to customers. Game Day sells...
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HW #11 (2 of 2) • Written Assignment (continued): - UK9 [8 pts] The federal government is providing a $7500 cash rebate to people who buy qualified electric vehicles. Assume: • Consumer choosing between Hyundai Kona vs Kona Electric, SE Edition • Cost to government is cost of rebate • Benefit to consumers is reduced annual operating costs • Use AAA estimates: https://www.aaa.com/autorepair/articles/true-cost-of-ev Consumer disbenefit is added cost to consumers to buy electric cars - For added cost, use Kelly Blue Book values https://www.kbb.com/compare-cars/ Some or all of increased cost is offset by receipt of tax credit Can assume credit received at time of purchase Assume car life = 8 years Assume resale value at 8 years = 50% of purchase price For a 2024 car purchased now, and ignoring environmental benefits, calculate a conventional B/C ratio from the federal government's perspective, assuming i = 5%
Transcribed Image Text:HW #11 (2 of 2) • Written Assignment (continued): - UK9 [8 pts] The federal government is providing a $7500 cash rebate to people who buy qualified electric vehicles. Assume: • Consumer choosing between Hyundai Kona vs Kona Electric, SE Edition • Cost to government is cost of rebate • Benefit to consumers is reduced annual operating costs • Use AAA estimates: https://www.aaa.com/autorepair/articles/true-cost-of-ev Consumer disbenefit is added cost to consumers to buy electric cars - For added cost, use Kelly Blue Book values https://www.kbb.com/compare-cars/ Some or all of increased cost is offset by receipt of tax credit Can assume credit received at time of purchase Assume car life = 8 years Assume resale value at 8 years = 50% of purchase price For a 2024 car purchased now, and ignoring environmental benefits, calculate a conventional B/C ratio from the federal government's perspective, assuming i = 5%
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