Question: Billy Bob wants to consider purchasing a new fuel efficient furnace/air conditioning unit.The unit has been bid to cost $3814 to purchase and install.He estimates
Billy Bob wants to consider purchasing a new fuel efficient furnace/air conditioning unit.The unit has been bid to cost $3814 to purchase and install.He estimates his annual savings to be $480 per year for the next 15 years.(Cost is at t=0, the savings can be considered annually beginning at t=1 and going until t=15).Billy considers his opportunity cost of funds to be 4%.If he uses the NPV method, what is the NPV he calculates for his project?
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