An environmentally friendly 2,800-square-foot green home (99% air tight) costs about 8% more to construct than a

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An environmentally friendly 2,800-square-foot green home (99% air tight) costs about 8% more to construct than a same-sized conventional home. Most green homes can save 15% per year on energy expenses to heat and cool the living space. For a $250,000 conventional home with a heating and cooling bill of $3,000 per year, how much would have to be saved in energy expenses per year to justify this home (i.e., B–C ratio greater than or equal to one)? The discount rate is 10% per year, and the expected life of the home is 30 years.

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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Engineering Economy

ISBN: 978-0133439274

16th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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