With high gas prices, the demand for hybrid automobiles such as the Toyota Prius and the Honda Civic Hybrid is very high. Dealers are rountinely charging over list for these vehicles, and the waiting list to get one is as long as three months. People are lured by the idea of 50 mile per gallon vehicles that still perform well and are willing to pay the high prices to get one.
Perform a cost/benefit analysis on the purchase of a Toyota Prius versus a Toyota Corolla. Assume the Prius sells for $24,000 (the average selling price according to edmonds.com) versus a Corolla that sells for $14,000. Also assume an average MPG for the Prius of 44 (EPA 2008 Rating) MPG and the Corolla at 32MPG (EPA 2008 rating). Use a gas price of $3.29 per gallon. Assume 15,000 miles per annum use.