A newsix-speed automatic transmission for automobiles, Ask an Expert

Economics

A newsix-speed automatic transmission for automobiles offers an estimated 3?% improvement in fuel economy compared to traditional four speed transmissions in front-wheel drive cars. If a four-speed transmission car averages 26 miles per gallon and gasoline costs $2.50 pergallon, how much extra can a motorist pay for a fuel-efficient six-speed transmission Assume that the car will be driven for 125,000 miles over its lifetime of 8 years. The motorist can earn 8?% per year on investments. Assume miles driven each year are roughly constant

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92000731

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