Question: Calculate the net present value ( NPV ) over a 1 0 - year period for a 1 0 , 0 0 0 square foot

Calculate the net present value (NPV) over a 10-year period for a 10,000 square foot facility
when choosing between:
a) Standard light fixtures costing $15 per square foot with a projected HVAC system size
requirement of 100 tons.
b) More expensive, energy-efficient light fixtures costing $25 per square foot that would allow for
a reduced HVAC system size requirement of 80 tons.
The cost of the HVAC system is $2,000 per ton with an annual operation cost of $1,500 per ton of
HVAC capacity. Use a 5% discount rate for the NPV calculation. Show all calculations and justify
your choice based on the NPV of initial and operational cost considerations.

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