Economics Project Harvard Case Solution & Analysis


As I havegraduated from Hofstra University, and recently got a reputable job in Friendly Ergo, which is a multinational corporation having exceptional competencies in diverse areas, the hiring of new engineers is primarily based on rotational programs, which might provide ongoing mentorship, in-depth experience, and training across the areas of business within a company. The company has contemplated to train new engineers through most effective rotational programs, structured and specific training programs. The ultimate purpose of the company is to develop and recruit capable leaders for their company.

Manufacturing, retail and distribution are key focused areas of Friendly Ergo. The company demanded that new hires must spend 6 to 8 months at the locations according to the needs of the company. In addition to this, aone-time bonus amounted at $5000 would be given to new hires, which they would spend on purchasing a new car, which might be helpful for them to recover their expenses incurred on spending their time at the new location for training purpose.

Furthermore, the monthly budget ranges between $500 and $1500 while paying expenses of the car such as maintenance expense, fuel expense and car insurance. The new location is Colorado.

Economics Project Harvard Case Solution & Analysis

New Locations Time Horizons:

Following are the locations along with their appropriate distance while driving from each way home to office and office to home, respectively.



New locationsDistance (each way) additional driving needs/week total  
§  Colorado location25 miles50%100 miles
§  Arkansas location10 miles50%40 miles
§  Miami location45 miles50%180 miles



The selection of car would be based on its properties;

cars Properties
§  smart fortwoElectric car
§  ford fusionHybrid car
§  mitsubishi outlanderRegular gas car


Factors Affecting Financial Decision:

The factors which might affect my financial decisions of purchasing a new car are discussed below;

Smart Fortwo (used):

  • The price of the best use car under $15,000 is $4,995(used_cars-t5495-used-smart-under-5000, 2017)
  • The maintenance cost is estimated to be ranged between $68 and $1794, whereas the average is $217(Smart Fortwo Repair & Maintenance Estimates, 2017).
  • The insurance cost is $220 a month and $2640 annually (Smart Fortwo insurance rates, 2017).
  • The tax incentive is $7500 (smart-ed, 2017).
  • The incentive cost is $169 per month (Smart Offers Its First Lease Incentive Program, 2017).
  • Lower fuel cost is charged on electric cars as compared to other hybrid and regular gas cars.

Ford fusion:

  • The price of Ford Fusion is $5,000(5 Affordable Hybrid Cars You Can Buy Now for a Steal, 2016).
  • The maintenance& repair cost of Mitsubishi Mirage falls with a range between $70 and $2619 and the average of maintenance and & repair cost is $189 (Ford Fusion Repair & Maintenance Estimates, 2017).
  • The tax incentive given to customers buying more efficient cars is $3400 (Hanson, 2009).
  • The insurance cost of Ford Fusion is $2228 per year or $186 per month (Insuring Your Ford Fusion, 2013).
  • The pre purchase inspection cost of cars ranges between $105 and $134 (Ford Fusion Pre-Purchase Car Inspection Cost, n.d.).

Mitsubishi outlander (used):

  • The price of Mitsubishi Outlander is $4828.
  • The estimated maintenance and repair cost ranges between $70 and $2086, with the average estimation of $206.......................

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