A new homeowner, Ms. Dee Young, needs to decide whether to install R-11 or R-19 insulation...

   

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A new homeowner, Ms. Dee Young, needs to decide whether to install R-11 or R-19 insulation in the attic of her new home. The insulated area is 1,500 square feet. The upgrade from R-11 to R-19 insulation costs $0.1 per square foot. The upgraded insulation is expected to save Ms. Dee Young approximately 400 kilowatt hours of energy usage per year. The planning horizon is 20 years and electricity costs $0.08/kWh. MARR is 10% per year. Based on a future worth analysis, is the upgrade to R-19 insulation economically justified? The future worth of R-19 insulation is $ Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places. The tolerance is ±0.15. R-19 insulation attractive. The builder has just announced a new option for Ms. Dee Young to consider. If a homeowner has selected the R-19 insulation, the builder will upgrade the insulation to R-30 for an additional $200. The R-30 insulation will save an additional 250 kWh per year over the R-19 insulation. Is this second insulation upgrade economically attractive based on future worth analysis? The life expectancy, electricity costs, and MARR remain at 20 years, $0.08/kWh, and 10% per year, respectively. Click here to access the TVM Factor Table Calculator. The future worth of R-30 insulation is $ Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places. The tolerance is ±0.15. R-30 insulation attractive. A new homeowner, Ms. Dee Young, needs to decide whether to install R-11 or R-19 insulation in the attic of her new home. The insulated area is 1,500 square feet. The upgrade from R-11 to R-19 insulation costs $0.1 per square foot. The upgraded insulation is expected to save Ms. Dee Young approximately 400 kilowatt hours of energy usage per year. The planning horizon is 20 years and electricity costs $0.08/kWh. MARR is 10% per year. Based on a future worth analysis, is the upgrade to R-19 insulation economically justified? The future worth of R-19 insulation is $ Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places. The tolerance is ±0.15. R-19 insulation attractive. The builder has just announced a new option for Ms. Dee Young to consider. If a homeowner has selected the R-19 insulation, the builder will upgrade the insulation to R-30 for an additional $200. The R-30 insulation will save an additional 250 kWh per year over the R-19 insulation. Is this second insulation upgrade economically attractive based on future worth analysis? The life expectancy, electricity costs, and MARR remain at 20 years, $0.08/kWh, and 10% per year, respectively. Click here to access the TVM Factor Table Calculator. The future worth of R-30 insulation is $ Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places. The tolerance is ±0.15. R-30 insulation attractive.

Answer rating: 100% (QA)

To determine whether the upgrade to R19 insulation is economically justified we can perform a future worth analysis The future worth is calculated by ... View the full answer