Question

In a move to provide additional sales for U.S. car manufacturers, the White House announced the purchase of 17,600 new fuel-efficient vehicles for the federal fleet. Suppose the new fleet, which includes 2,500 hybrid sedans, will cost $275million. As an accountant in the White House Budget Office (WHBO), you have been asked to calculate the following:Required:a. If each hybrid vehicle will have an average cost of $26,000, what will be the average cost per non-hybrid vehicle? Round to the nearest whole dollar.b. Suppose furthermore, the White House said that by replacing less efficient vehicles, the government will reduce gasoline consumption by 1.9 million gallons per year and prevent 27 million pounds of carbon dioxide from entering the atmosphere. On average, how many gallons of gasoline and how many pounds of carbon dioxide will be "saved" per year per vehicle? Round to the nearest whole gallon and whole pound.

Answer 1

Answer:

a. If each hybrid vehicle will have an average cost of $26,000, what will be the average cost per non-hybrid vehicle?

each hybrid car costs $26,000 x 2,500 = $65,000,000

total cost of non-hybrid cars = $275,000,000 - $65,000,000 = $210,000,000

average cost of non-hybrid car = $210,000,000 / (17,600 - 2,500) = $13,907.28 per non-hybrid car

b. Suppose furthermore, the White House said that by replacing less efficient vehicles, the government will reduce gasoline consumption by 1.9 million gallons per year and prevent 27 million pounds of carbon dioxide from entering the atmosphere. On average, how many gallons of gasoline and how many pounds of carbon dioxide will be "saved" per year per vehicle? Round to the nearest whole gallon and whole pound.

1,900,000 gallons of gasoline saved per year / 17,600 cars = 107.95 ≈ 108 gallons of gasoline saved per car

27,000,000 pounds of carbon dioxide less per year / 17,600 cars = 1,534.09 ≈ 1,534 pounds of carbon dioxide saved per car