Question $3$

Buff Corp is considering installing a more efficient furnace. The furnace costs $$150,000$ to install. Buff Corp expects the furnace to generate $$25,000$ in energy cost savings per year for $8$ years. The furnace has no salvage value. Buff Corp has a required rate of return of $12\%.$ The town in which Buff Corp is located has proposed offering a rebate to companies installing efficient fumaces, provided immediately at the time of installation. If Buff Corp evaluates projects based on NPV$,$ Which of the following describes the appropriate decision rule for Buff Corp $($assuming there are no benefits to the installation besides those described above$)?$

A$.$ Always buy furnace

B$.$ Buy furnace only if rebate greater than $$8,750$

C$.$ Buy furnace only if rebate greater than $$16,625$

D$.$ Buy furnace only if rebate greater than $$25,800$

E$.$ Buy furnace only if rebate is greater than $$34,025$

Present Value of Annuity of $$1$

$\backslash$table$[[$Periods$,10\%,12\%,14\%$