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5.         I’ve spent $10,000 to install high efficiency windows in my home. They are expected to...

5.         I’ve spent $10,000 to install high efficiency windows in my home. They are expected to last 20 years.   I expect my annual heating bill to decrease by $1,000.

a.         What is the “net present value of my investment? Use a discount rate that is appropriate for YOU as an individual?  

b.         If city hall had made this investment, what is the “payback” time? Use a discount rate appropriate for a public project.

c.         Calculate the “Internal Rate of Return” for this project. Would a profit maximizing company be willing to invest in this project at their corporate offices?

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jeff jeffy answered 2 years ago
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