The city of Metropolis is considering replacing incandescent bulbs in traffic lights with light-emitting diode (LED)...

The city of Metropolis is considering replacing incandescent bulbs in traffic lights with light-emitting diode (LED) lights because they use significantly less energy and last much longer without abrupt failure. Currently Metropolis has 80,000 incandescent bulbs in traffic lights at approximately 12,000 intersections. It is estimated that replacing all the incandescent bulbs with LED will cost $46.02 million. However, the investment is also estimated to save the city $8.85 million per year in energy costs. Answer the following questions on a Word Doc or Excel Spreadsheet :

1- Determine the payback period of converting Metropolis’s traffic lights to LEDs.

2- If the average life of an incandescent traffic light is one year and the average life of an LED traffic light is seven years, should the city finance the investment in LED’s at an interest rate of 5% per year? Support your answer by showing calculations or copying and pasting your spreadsheet.

3- Assume the project manager for the city of Metropolis asked you to provide justific2- ation for the project. Write a brief email to the project manager describing why or why not Metropolis should invest in LED lights using the support figures you calculated for #2.

Solutions

Expert Solution

ekkarill92 answered 11 months ago

Next > < Previous

Related Solutions

Light emitting diode (LED) light bulbs have become required in recent years, but do they make...

Light emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.46 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.45 and lasts for 12,000 hours. A kilowatt-hour is 1,000 watts for 1 hour. Suppose you have a residence with a lot of incandescent bulbs that are used on average 500 hours a year. The average bulb will be...

Light emitting diode (LED) light bulbs have become required in recent years, but do they make...

Light emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.53 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.80 and lasts for 12,000 hours. A kilowatt-hour is 1,000 watts for 1 hour. Suppose you have a residence with a lot of incandescent bulbs that are used on average 500 hours a year. The average bulb will be...

Light-emitting diode (LED) light bulbs have become required in recent years, but do they make financial...

Light-emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incadescent light bulb costs $.45 and lasts for 1,000 hours. A 7-watt LED, which provides the same light, costs $2.25 and lasts for 40,000 hours. A kilowatt-hour of electricity costs $.121, which is about the national average. A kilowatt-hour is 1,000 watts for 1 hour. Suppose you have a residence with a lot of incandescent bulbs that are used...

Light emitting diode (LEDs) light bulbs have become required in recent years, but do they make...

Light emitting diode (LEDs) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.49 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.60 and lasts for 12,000 hours. A kilowatt hour of electricity costs $.125. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type. An industrial user in...

Light emitting diode (LEDs) light bulbs have become required in recent years, but do they make...

Light emitting diode (LEDs) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.54 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.85 and lasts for 12,000 hours. A kilowatt hour of electricity costs $.130. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type. An industrial user in...

A new LED light to replace incandescent bulbs has come on the market. The box says...

A new LED light to replace incandescent bulbs has come on the market. The box says it has an average life of 9,000 hours with a standard deviation of 300 hours. a) What is the probability that a single bulb will last between 8950 and 9100 hours? b) What is the probability that the mean of a sample of 70 bulbs picked at random will be between 8950 and 9100 hours?

Light emitting diodes (LED) light bulbs have become required in recent years, but do they make...

Light emitting diodes (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.39 and lasts 1,000 hours. A 15-watt LED, which provides the same light, costs $3.10 and lasts for 12,000 hours. A kilowatt-hour of electricity costs $.115. A kilowatt-hour is 1,000 watts for 1 hour. If you require a return of 11 percent and use a light fixture 500 hours per year, what is the...

Payback Period and IRR of a Cost Reduction Proposal-Differential Analysis A light-emitting diode (LED) is a...

Payback Period and IRR of a Cost Reduction Proposal-Differential Analysis A light-emitting diode (LED) is a semiconductor diode that emits narrow-spectrum light. Although relatively expensive when compared to incandescent bulbs, they use significantly less energy and last six to ten times longer, with a slow decline in performance rather than an abrupt failure. Metropolitan City currently has 80,000 incandescent bulbs in traffic lights at approximately 12,000 intersections. It is estimated that replacing all the incandescent bulbs with LED will cost...

Compact fluorescent bulbs are much more efficient at producing light than are ordinary incandescent bulbs. They...

Compact fluorescent bulbs are much more efficient at producing light than are ordinary incandescent bulbs. They initially cost much more, but last far longer and use much less electricity. According to one study of these bulbs, a compact bulb that produces as much light as a 100 W W incandescent bulb uses only 23.0 W W of power. The compact bulb lasts 10000 hours, on the average, and costs $ $ 11.00, whereas the incandescent bulb costs only $ $...

The electric usage of LED is 8 watts and incandescent bulbs take up 40 watts. The...

The electric usage of LED is 8 watts and incandescent bulbs take up 40 watts. The lifetime of LED bulbs is 25 000 hours and the lifetime for incandescent bulb is 2500 hours. How much energy could be saved each year by replacing incandescent bulbs with LED bulbs? Assume that six 40-watt lamps arer lit an average of three hours a night and they are each replaces with 8 watt LED-bulbs.

Subjects