Question: A contractor recommends replacing your older but still perfectly functional furnace with a new high-efficiency furnace. You look up the specs of the old furnace

A contractor recommends replacing your older but still perfectly functional furnace with a new high-efficiency furnace. You look up the specs of the old furnace and find that it is rated to be 80% efficient at converting the chemical energy of natural gas into the heat delivered to the interior of your home. In contrast, the new furnace the contractor offers is 95% efficient. With the old furnace, you typically spent $1000 per year on natural gas to heat your home and the contractor offers to install the furnace for $4000. In how many years would your investment in a high- efficiency furnace pay off? In other words, in how many years will you break even? Assume that the price of natural gas is $0.01 per cubic foot and the heat of combustion is 1000 BTU per cubic foot.

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Heres how to calculate the payback period for the new highefficiency furnace 1 Calculate the annual gas usage with the old furnace We know the annual ... View full answer

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