(Table: Car Costs) The table shows the initial cost outlays of two versions of the Ford Escape and their estimated annual fuel costs. Stu is not sure whether he wants the hybrid or standard model....

Extracted text: (Table: Car Costs) The table shows the initial cost outlays of two versions of the Ford Escape and their estimated annual fuel costs. Stu is not sure whether he wants the hybrid or standard model. Although more expensive, the hybrid model has better gas mileage and would save $890 in gas per year. Assume both cars are worthless after six years. At a 7% interest rate, what should Stu do? ITT Costs if Hybrid Bought -$27,000 Costs if Standard Bought -$22,500 Year -2,000 -2,000 -2,890 -2,890 1 3 -2,000 -2,000 -2,000 -2,890 -2,890 -2,890 -2,890 4 6. -2,000 Buy the standard model, since the net present value of the total cost of the standard is more than that of the hybrid. Buy either model, since the net present value of the cost difference between the hybrid and the standard model is zero. Buy the standard, since the net present value of the total cost of the standard is less than that of the hybrid. Buy the hybrid, since the net present value of the total cost of the hybrid is less than that of the standard.