A building is being renovated, including replacing windows with standard quality windows. A higher-efficiency replacement window is
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Question:
A building is being renovated, including replacing windows with standard quality windows. A higher-efficiency replacement window is available and costs $150 per window. The building has ten windows. Compared to the standard model, if the higher efficiency model is used for all the windows, the annual gas savings from reduced heating costs are expected to be $150 a year and the annual electricity savings from reduced cooling costs are expected to be $100 a year.
What is the simple payback?
If we use a time-value-of-money approach with an interest rate of 5%, how long would it take to break even?
Related Book For
Managerial Accounting An Integrative Approach
ISBN: 9780999500491
2nd Edition
Authors: C J Mcnair Connoly, Kenneth Merchant
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