The previous two problems suggest that using CFLs is a good idea from a purely financial perspective unless you live in an area where power is relatively inexpensive, but there is another wrinkle. 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 about halfway through its life, so it will have 500 hours remaining (and you can't tell which bulbs are older or newer). At what cost per kilowatt-hour does it make sense to replace your incandescent bulbs today?
Answer to relevant QuestionsThe debate regarding CFLs versus incandescent bulbs (see Problems 25-27) has even more wrinkles. In no particular order:1. Incandescent bulbs generate a lot more heat than CFLs.2. CFL prices will probably decline relative to ...To solve the bid price problem presented in the text, we set the project NPV equal to zero and found the required price using the definition of OCF. Thus the bid price represents a financial breakeven level for the project. ...K-Too Ever wear Corporation can manufacture mountain climbing shoes for $31.85 per pair in variable raw material costs and $22.80 per pair in variable labor expense. The shoes sell for $145 per pair. Last year, production ...A proposed project has fixed costs of $84,000 per year. The operating cash flow at 7,500 units is $93,200. Ignoring the effect of taxes, what is the degree of operating leverage? If units sold rise from 7,500 to 8,000, what ...Would you be willing to pay $24,099 today in exchange for $100,000 in 30 years? What would be the key considerations in answering yes or no? Would your answer depend on who is making the promise to repay?
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