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A large automobile manufacturer has developed a continuous variable transmission (CVT) that provides smooth shifting and enhances fuel efficiency by 3 mpg of gasoline. The extra cost of a CVT is $850 on the sticker price of a new car. For a particular model averaging 25 miles per gallon with the CVT, what is the cost of gasoline (dollars per gallon) that makes this option affordable when the buyer's interest rate is 9% per year? The car will be driven 110,000 miles uniformly over an eight-year period.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91266526

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