Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 3

Interpreting Average Cost Concern for gas emissions and depletion of nonrenewable resources has caused environmentalists and others to push for higher fuel-efficiency standards for new cars. The current Corporate Automotive Fuel Efficiency (CAFE) standards require automakers to produce an overall fuel efficiency of 27.5 miles per gallon for all autos produced. Currently the U.S. government supports the development of hybrid autos that combine gas and electric power as the solution to the problem. Others propose simply raising the CAFE standards for auto manufacturers. To study the issue, the American Council for an Energy-Efficient Economy(ACEEE) conducted research to determine the cost for raising fuel efficiency for the different proposals. Their findings are as follows:

The increase in fuel economy required by higher CAFE standards would require automakers to use conventional technology to improve engines and transmissions. The hybrid vehicles require newer technology and electric motors.
Required Give a brief critical review of the ACEEE's research results. What questions would you have for the researchers who presented these results